Nkt A/s · OMXCOP:NKT
Nkt A/s — Q3 2006 Earnings Presentation
31 slides from Nkt A/s's earnings presentation, Nov 30, 2006
Slide 1: Presentation of Third quarter 2006
NKT Holding A/S Presentation of Third quarter 2006 30 November 2006
Slide 2: Agenda
Agenda › Headlines 3rd quarter 2006 › Financial result › 3rd quarter 2006 › Companies › Nilfisk-Advance Group › NKT Cables Group › NKT Flexibles › NKT Photonics Group › Expectations 2006 › Q & A session
Slide 3: Group structure November 2006
Group structure November 2006 06 g Q3 20 dur in e s hang No c NKT Group 2006 NKT Holding A/S Nilfisk-Advance Group NKT Cables Group NKT Photonics Group › Europe › Northern Europe › Crystal Fibre › North America › Central Europe › KOHERAS › Oceania › Eastern Europe › LIOS Technology › Asia › China ›
Slide 4: Headlines 3rd quarter 2006
Headlines 3rd quarter 2006 › Solid organic growth in all business segments; 9% consolidated growth › Strong 3rd quarter in NKT Cables and NKT Flexibles › Margin improvement in Nilfisk-Advance › Growth in Nilfisk-Advance recovered in 3rd quarter – in line with guidance › Satisfactory order intake in
Slide 5: Status on Upgrade to Next Level Strategy
Status on Upgrade to Next Level Strategy
Slide 6: Share price development and liquidity
Share price development 500 Share price 475 NKT Holding OMX20 rebased 450 425 › 1/1 2005: 159 400 375 350 › 31/12 2005: 289 325 300 › 27/11 2006: 464 275 250 225 200 175 › Increase 05: 82% 150 125 › Increase 06: 60% 100 30.12.04 30.12.05 Liquidity mDKK 20 days moving average 60 days moving average 5
Slide 7: Agenda
Agenda › Headlines 3rd quarter 2006 › Financial result › 3rd quarter 2006 › Capital structure › Companies › Nilfisk-Advance Group › NKT Cables Group › NKT Flexibles › NKT Photonics Group › Expectations 2006 › Q & A session
Slide 8: Financial results – 3rd quarter 2006
Financial results – 3rd quarter 2006 2006 2005 Change Consensus *) Revenue 2703 2231 472 21% 2791 EBITDA 255 190 65 34% 240 Depreciation -53 -51 -2 -55 EBIT 202 139 63 45% 185 Financial items -9 -1 -8 -14 Result before tax 193 138 55 40% 171 Tax -47 -21 -26 -40 Net result 146 117 29 25% 131 EBIT-mar
Slide 9: Financial results – 3rd quarter 2006
Financial results – 3rd quarter 2006 USD/ton Revenue increased by 472 mDKK: • Metal prices => +270 mDKK Copper • FX changes => - 9 mDKK • 9% organic growth => +211 mDKK - NKT Cables +13% +95% - Nilfisk-Advance +5% - NKT Photonics -19% 2006 2005 Change EBITDA increased by 65 mDKK: Revenue 2703 2231 4
Slide 10: Development in consolidated EBITDA
10,0% 9,0% 8,0% 7,0% 6,0% 5,0% 4,0% 3,0% 2,0% 890 Q3-06 EBITDA% 829 Q2-06 760 Q1-06 709 Q4-05 634 Q3-05 563 Q2-05 503 Q1-05 EBITDA (LTM) excl non-recurring items 454 Q4-04 444 Q3-04 419 Q2-04 371 Q1-04 Development in consolidated EBITDA 360 Q4-03 296 Q3-03 244 Q2-03 218 Q1-03 164 Q4-02 178 Q3-02 175
Slide 11: Trends – Nilfisk-Advance
Trends – Nilfisk-Advance 2003 2004 2005 2006 Organic growth (Y/Y) - Quarterly 7% 3% 5% 7% 8% 10% 8% 6% 2% 9% 8% 7% 10% 3% 5% - Annually 5% 7% 7% 6% 170 11,0% % ,4 % ,2 10 10 150 10,5% 9% 7% 9, 6% 6% 9, 5% 130 10,0% EBITDA (mDKK) EBITDA% (LTM) 4% 9, 9, 9, 9, 1% 1% 1% 0% 0% 110 9,5% 9, 9% 9, 9, 9, 9,
Slide 12: Gross margin development – Nilfisk-Advance
Gross margin development – Nilfisk-Advance 46% The ALTO acquisition diluted the margin 45% from 44% to 40% 44% 43% 42% 41% 40% 39% 38% 37% 36% 2003 2004 2005 2006 Monthly margin Trailing 12 months margin
Slide 13: Trends – NKT Cables
Quarterly - Annually EBITDA (mDKK) 10 20 30 40 50 60 70 80 90 100 Q1-03 18 4,7% Organic growth (Y/Y) - Q2-03 49 4,7% Trends – NKT Cables Q3-03 66 5,9% 3% 33 6,1% 2003 Q4-03 Q1-04 22 6,0% 3% 3% 3% 0% Q2-04 64 6,2% 10% Q3-04 70 6,1% Q4-04 36 5,8% 7% 2004 Q1-05 23 5,9% 4% 4% 7% Q2-05 62 5,7% Q3-05 79 5
Slide 14: Net interest-bearing debt
-800 -600 -400 -200 0 -1.400 -1.200 -1.000 jan-05 feb-05 mar-05 Actual apr-05 Forecast maj-05 jun-05 Net interestbearing debt jul-05 aug-05 sep-05 okt-05 nov-05 dec-05 jan-06 Note: The acquisition of Kablo Elektro (~ 800 mDKK) is not included. feb-06 mar-06 apr-06 maj-06 jun-06 jul-06 aug-06 sep-06
Slide 15: Working Capital
18,0% 18,5% 19,0% 19,5% 20,0% 20,5% 21,0% 21,5% jan-03 feb-03 % of revenue mar-03 apr-03 maj-03 jun-03 Working Capital jul-03 aug-03 sep-03 okt-03 nov-03 dec-03 jan-04 feb-04 mar-04 apr-04 maj-04 jun-04 jul-04 aug-04 sep-04 Working Capital remains at 20% of revenue okt-04 LTM nov-04 dec-04 jan-05
Slide 16: Gross Capital Expenditures
Gross Capital Expenditures Trailing 12 months gross CAPEX 300 3,4% 3,2% 250 3,0% 2,8% 200 2,6% 150 2,4% 2,2% 100 2,0% 2003 2004 2005 2006 CAPEX (gross) % af revenue (LTM) Annualized gross CAPEX is approximately 275 mDKK, with 70% to NKT Cables, 25% to Nilfisk-Advance and 5% to NKT Photonics Group
Slide 17: Return on Capital Employed (RoCE%)
Return on Capital Employed (RoCE%) 30,0% 25,0% NKT Cables 20,0% 15,0% Nilfisk-Advance 10,0% 5,0% 0,0% 2003 2004 2005 2006
Slide 18: Capital structure
Capital structure EBITDA*) NIBD/EBITDA mDKK (LTM) Capital structure 1000 890 3,0x 829 760 › Target gearing: 60-80% 800 709 2,5x 634 563 2,0x 600 503 419 444 454 › Target solvency rate: 30-35% 371 1,5x 400 1,0x › Target NIBD/EBITDA: Up to 2,5x 200 0,5x › Minimum dividend: 8 DKK/share 0 0,0x › Increas
Slide 19: Agenda
Agenda › Headlines 3rd quarter 2006 › Financial result › 3rd quarter 2006 › Capital structure › Companies › Nilfisk-Advance Group › NKT Cables Group › NKT Flexibles › NKT Photonics Group › Expectations 2006 › Q & A session
Slide 20: Nilfisk-Advance Group
Nilfisk-Advance Group › Organic growth 5% for the quarter and 6% YTD › EBITDA-margin continues to improve › Working capital has stabilized at 22,5% of sales
Slide 21: Activities
Activities › Higher material and transportation costs offset by revenue management › Organic growth picked up in Q3 after low Q2 › Consolidated organic growth of 5% fueled by recovery in US growth (i.e. 6%) › Plant closures in US (Ohio), Sweden (Åmål) and Italy (Parma) completed in Q2 › Efficiency i
Slide 22: NKT Cables Group
NKT Cables Group › Very satisfactory organic growth of 13% in Q3 › Profitability continues at high level › Position in Czech strengthened through acquisitions in Q3 › The sector upturn for the European energy market remains robust › Working capital remains stabile at 17% of revenue
Slide 23: Activities
Activities › All products and regions contribute to the consolidated organic growth of 13% › Improved balance between demand and capacity in the industry › Sector upturn in energy market › Focus on bottlenecks and capacity expansions with the aim to improve service levels towards customers › Metal p
Slide 24: NKT Flexibles
NKT Flexibles › Oil service companies enjoy massive sector upturn › NKT Flexibles continues to prove its capability to process high volumes › EBITDA-margin YTD amounts to 15,8% after Q3 › Backlog at September 30, 2006: 1170 mDKK
Slide 25: Financial performance 2001-2006
Financial performance 2001-2006 900 50% 800 40% 700 600 30% 500 20% 400 300 10% 200 0% 100 -10% 0 -100 -20% 2001 2002 2003 2004 2005 2006 Revenue (LTM) EBITDA% (LTM) EBITDA (LTM) Working Capital% (LTM)
Slide 26: NKT Photonics Group
NKT Photonics Group › Revenue: 22 mDKK in 2006 vs. 27 mDKK in 2005 › EBITDA: (8) mDKK in 2006 vs. (1) mDKK in 2005 Accelerating development in white light sources and other lasers
Slide 27: Activities
Activities › Continued focus on product development - Sub-assemblies for high power fiber lasers (next step 350W) Includes development of components such as power combiners etc. - White light source development in collaboration with Leica Micro- systems on track - Development of hollow-core fibers f
Slide 28: Agenda
Agenda › Headlines 3rd quarter 2006 › Financial result › 3rd quarter 2006 › Capital structure › Companies › Nilfisk-Advance Group › NKT Cables Group › NKT Flexibles › NKT Photonics Group › Expectations 2006 › Q & A session
Slide 29: Expectations 2006 - assumptions
Expectations 2006 - assumptions › Group structure as of November 2006 › Current – Exchange rates – Interest rate levels – Metal and raw material prices – however copper at 5500 EUR/ton › Present economical climate › No mergers, acquisitions and/or divestitures
Slide 30: Expectations 2006
Expectations 2006 › Turnover ~5,4 bnDKK same › Organic growth 5% same › EBIT ~7,4% excl. divestment gain (109 mDKK) same › Turnover ~ 5,2 bnDKK same › Organic growth ~16% same › EBIT ~ 5,8% (previous guidance: ~5,4%) up › Turnover ~105 mDKK (previous guidance: 115 mDKK) down › EBITDA (20) mDKK same
Slide 31: Agenda
Agenda › Headlines 3rd quarter 2006 › Financial result › 3rd quarter 2006 › Capital structure › Companies › Nilfisk-Advance Group › NKT Cables Group › NKT Flexibles › NKT Photonics Group › Expectations 2006 › Q & A session