Nkt A/s · OMXCOP:NKT
Nkt A/s — Q3 2014 Earnings Presentation
35 slides from Nkt A/s's earnings presentation, Nov 13, 2014
Slide 1: NKT Interim Report Q3 2014
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 1 NKT Interim Report Q3 2014 Webcast, 13 November 2014 at 10:00 CET
Slide 2: Forward looking statements
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 2 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 Group’s control, m
Slide 3: Change of management in NKT Cables
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 3 Change of management in NKT Cables Today, the Board of Directors has appointed Michael Hedegaard Lyng as CEO of NKT Cables • As a consequence, Marc van’t Noordende will resign with effect of today • Michael Hedegaard Lyng has been w
Slide 4: Introducing today's presenters
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 4 Introducing today’s presenters Michael Hedegaard Lyng Jonas Persson NKT Holding / NKT Cables Nilfisk-Advance Group Executive CEO President & CEO Director & CFO
Slide 5: Agenda: Highlights Q3 2014
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 5 Agenda Highlights Q3 2014 Business areas • Nilfisk-Advance • NKT Cables • Photonics Group Expectations 2014 Questions & Answers
Slide 6: Highlights Q3 2014
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 6 Highlights Q3 2014 Overall, Q3 and YTD performance in line with expectations • Q3 organic growth of 1% and YTD 2% (within range of 2-3% for full year) • Operational EBITDA continued upward trend, increasing to DKK 270m in Q3 (Y/Y: +
Slide 7: Group financial highlights Q3 14
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 7 Group financial highlights Q3 2014 Revenue DKK 3,946m (Q3 2013: DKK 4,077m) Working capital amounts to DKK 3.0bn at 18.7%, LTM (Q3 2013: DKK 3.3bn at 19.8%) Organic growth 1% (YTD 2014: 2%) Cash flow from operations of DKK 129m Q3 2
Slide 8: Positive operational EBITDA trend continued
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 8 Positive operational EBITDA trend continued Operational EBITDA, LTM DKKm • Negative organic 1,500 10% growth of 2% for 2012 • operational Q3 EBITDA margin EBITDA of std. LTM 1,200 DKK2012 270mof increased 8,1% or 980 LTM 8% mDKK to
Slide 9: DRIVE showing clear impact in operational EBITDA
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 9 DRIVE showing clear impact in operational EBITDA DKKm Q3 2014 Q3 2013 Change *01 DKKm Revenue 3,946 4,077 -131 *01 Revenue decreased by -131 Metal prices -110 Revenue, std. metal prices 3,281 3,282 -1 FX changes -38 Acquisitions 0 O
Slide 10: Working capital level at four year low
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 10 Working capital level at four year low Working capital Q3 2013 Q3 2014 19.8% 18.7% % of revenue, LTM 24.0% DKK 3,272m* DKK 3,049m* 23.0% 1.1% point decrease in WC 22.0% vs. 19.8% Q3 2013, LTM 21.0% 20.0% Significant exchange rate e
Slide 11: NKT Cables driving the improvement in working capital
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 11 NKT Cables driving the improvement in working capital Working capital by business area (Y/Y) DKKm 3,600 3,400 162 Nilfisk-Advance -311 increased working 3,200 19.5%* -74 capital due to accounts 18.0%* 3,000 receivables and currency
Slide 12: YTD cash flow from operations improved by DKK 612m vs. last year
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 12 YTD cash flow from operations improved by DKK 612m vs. last year Q1-Q3 Q1-Q3 DKKm Q3 2014 Q3 2013 2014 2013 DKK 612m improvement in EBITDA 226 241 744 737 YTD cash flow from Interest, net -21 -36 -73 -124 operations vs. last year C
Slide 13: Continued reduction in financial leverage
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 13 Continued reduction in financial leverage Net interest-bearing debt (x oper. EBITDA) Q3 2013 Q3 2014 NIBD increased by 2.6x 1.8x DKK 111m since Q2 ’14 DKKm DKK 2,753m DKK 2,119m driven by currency 5,000 6.0x translation 4,500 4,000
Slide 14: Agenda: Business areas
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 14 Agenda Highlights Q3 2014 Business areas • Nilfisk-Advance • NKT Cables • Photonics Group Expectations 2014 Questions & Answers
Slide 15: Nilfisk-Advance
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 15 Nilfisk-Advance
Slide 16: Overall organic growth YTD has been satisfactory
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 16 Overall organic growth YTD has been satisfactory APAC had a challenging Q3 and YTD performance is weak Nilfisk-Advance Organic growth 2011 2012 2013 2014 - Quarterly (Y/Y) 5% 8% 9% 9% 4% 1% -4% 1% 1% 4% 7% 1% 9% 4% 0% - Annually 8%
Slide 17: Investments in sales and service temporarily impact earnings
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 17 Investments in sales and service temporarily impact earnings Nilfisk-Advance - Operational EBITDA, LTM 11.9% 12.0% 12.1% 11.9% 250 14% 11.9% 11.7% 10.5% 11.7% 11.8% 11.6% 11.8% 10.6% 11.7% 13% 11.7% 200 EBITDA margin fell to 11.7%
Slide 18: Five main growth levers
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 18 Five main growth levers Front-end 1 Step-up in sales force investments 2 Commercial Excellence programme roll-out continues 3 Establishing a central service organisation Innovation 4 Strong product pipeline, demand for basic easy-t
Slide 19: Front-end investments, step-up in sales and service set-up
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 19 1 Front-end investments, step-up in sales and service set-up Sales people in action Front-end investments rationale • A strategic priority for Nilfisk-Advance is to get closer to the customers and strengthen the market access • The
Slide 20: Increased investments in selling costs and lowered administration costs
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 20 Increased investments in selling costs 1 and lowered administration costs Nilfisk-Advance - Development of overhead cost elements (excl. product development)* 110 Increased investments in sales and Selling cost ratio service force
Slide 21: Commercial Excellence programme, global roll-out continues
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 21 2 Commercial Excellence programme, global roll-out continues Global programme to further improve mid- to long-term sales and service effectiveness • New tools and initiatives to enhance sales setup, particularly cross-sales • New c
Slide 22: Strong focus on service through a central service organisation
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 22 3 Strong focus on service through a central service organisation Strong service focus • Central service organisation with global responsibility • 21 technicians have been added Y/Y to the global service force • New global service c
Slide 23: Strong product pipeline, demand for basic easy-to-use products
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 23 4 Strong product pipeline, demand for basic easy-to-use products Highlights • 3% of annual revenue Scrubber Nilfisk SC450 High-pressure washer invested in product • Basic, mid-market, easy-to-use Nilfisk Excellent development scrub
Slide 24: Supply Chain, global transformation programme progressing
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 24 5 Supply Chain, global transformation programme progressing The programme has already made concrete improvements • Improving customer delivery experience ‐ Delivery confirmation improved by implementing a “Global Available To Promi
Slide 25: Investments in sales and service set-up led to decreased margin
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 25 Investments in sales and service set-up led to decreased margin Financials Highlights Q3 YTD • Gross margin: Up 0.6% on same quarter last year despite DKKm 2014 2013 2014 2013 negative product mix effect and increased price competi
Slide 26: NKT Cables
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 26 NKT Cables
Slide 27: Operational EBITDA improved by DRIVE impact
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 27 Operational EBITDA improved by DRIVE impact NKT Cables - Operational EBITDA, LTM 160 10% Realised 1% organic growth 6.6% 140 (YTD: -2%) 5.6% 6.1% 8% • Projects 13% (YTD: -6%) 4.8% 5.3% 5.5% 120 Oper. EBITDA (DKKm) 5.7% 5.4% 5.4% 5.
Slide 28: DRIVE expectations increased by DKK 40m to DKK 170m for 2014
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 28 DRIVE expectations increased by DKK 40m to DKK 170m for 2014 Cost FTE reduction One-off costs Capex improvements Q3 2014 ~ DKK 50m 66 FTE DKK 44m DKK 2m Realised YTD 2014 ~ DKK 110m 184 FTE DKK 97m DKK 6m Realised (~ DKK 180m run-r
Slide 29: Operational EBITDA up 30% vs. last year
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 29 Operational EBITDA up 30% vs. last year DRIVE continues to deliver above expectations Financials Highlights Q3 YTD DKKm 2014 2013 2014 2013 • Oper. EBITDA increased by 30% compared to Q3 2013 Revenue 2,322 2,456 6,583 6,492 deliver
Slide 30: Photonics Group
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 30 Photonics Group
Slide 31: Growth expectations sustained, new US business established
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 31 Growth expectations sustained, new US business established Financials Highlights Q3 YTD • Q3 org. growth of 4% and YTD 11% DKKm 2014 2013 2014 2013 • Imaging: The base for expansion of blue-chip OEM Revenue 65 62 197 179 customers
Slide 32: Agenda: Expectations 2014
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 32 Agenda Highlights Q3 2014 Business areas • Nilfisk-Advance • NKT Cables • Photonics Group Expectations 2014 Questions & Answers
Slide 33: Maintain expectations for full year 2014
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 33 Maintain expectations for full year 2014 Planning assumptions NKT expectations 2014 Original Revised Q3 • Consolidated organic growth of around 0-3% NKT • Operational EBITDA margin of 9-9.5% - Organic growth 0-3% Unchanged (std. me
Slide 34: Agenda: Questions & Answers
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 34 Agenda Highlights Q3 2014 Business areas • Nilfisk-Advance • NKT Cables • Photonics Group Expectations 2014 Questions & Answers
Slide 35: Financial calendar
NKT I IR presentation I Interim Report Q3 2014 13 November 2014 I 35 Financial calendar 2015 27 February 2014 Annual Report 25 March Annual General Meeting 13 May Interim Report, Q1 20 August Interim Report, Q2 12 November Interim Report, Q3