NKT Holding Interim Report Q3 2012 Audiocast presentation 8 November 2012 at 10:00 am CET
Agenda Page Page 2 2 NKT Group Highlights Q3 2012 Financial results Q3 2012 Companies NKT Cables Nilfisk-Advance Photonics Group Expectations 2012 Questions & Answers
Group structure November 2012 Page Page 3 3 NKT Holding NKT Cables Nilfisk-Advance North, Central and Eastern Europe, China, Australia Global presence Photonics Group Europe, North America, Asia
Highlights Q3 2012 Page Page 4 4 Revenue 3.816 mdkk vs. 3.912 mdkk in Q3 2011 Organic growth -2% in Q3 2012 and -3% in Q1-Q3 2012 Organic growth Q3 2012 Q1-Q3 2012 NKT Cables 0% -6% Nilfisk-Advance -4% -1% Photonics Group -11% 6% Operational EBITDA 251 mdkk (8,3%) vs. 225 mdkk (7,4%) in Q3 2011 Earnings before tax (EBT) of continuing operations amount to 58 mdkk vs. -11 mdkk in Q3 2011 Earnings of discontinued operations amounts to 0 mdkk vs. 67 mdkk in Q3 2011 Profit 37 mdkk vs. 43 mdkk in Q3 2011 WC amounts to 3,2 bndkk vs. 3,0 bndkk end Q2. LTM at 20,4% vs. 20,6% NIBD increased to 2,8 bndkk from 2,7 bndkk end Q2 2012 Expectations for 2012 The general economic uncertainty has further slowed the development in organic growth rates compared with expectations in August 2012 Expected negative organic growth in revenue of approx. 2-3%, compared with previous forecasts of a flat organic growth Operational EBITDA is now expected to be approx.1.000 mdkk Expected Group net profit is unchanged at approx. 1,6 bndkk
Operational EBITDA Group Page Page 5 5 1.500 13% 1.200 11% mdkk 900 600 9% 7% Adjusted for share of profit in NKT Flexibles 300 0 1.261 Q1-08 1.268 Q2-08 1.240 Q3-08 1.078 Q4-08 930 Q1-09 811 Q2-09 751 Q3-09 799 Q4-09 907 Q1-10 915 Q2-10 952 Q3-10 895 Q4-10 869 Q1-11 808 Q2-11 775 Q3-11 878 Q4-11 914 Q1-12 955 Q2-12 980 Q3-13 5% 3% Oper. EBITDA LTM mdkk (Continued ope.) Oper. EBITDA% LTM, std. (Continued ope.) Oper. EBITDA% LTM (Continued ope.) Organic growth of -2% for Q3 2012 EBITDA margin std. LTM Q3 2012 of 8,1% or 980 mdkk an increase from 7,9% (955 mdkk) in Q2 2012
Manufacturing PMI Page Page 6 6 62 57 52 47 42 37 32 2005 2006 2007 2008 2009 2010 2011 2012 USA EURO zone China Breakeven Recession Expectation indicator Above the line indicates positive expectations for the manufacturing sector and below the line indicates declining expectations for the manufacturing sector Below the line indicates expectations of recession (Updated as of 2 November 2012)
Agenda Page Page 7 7 NKT Group Highlights Q3 2012 Financial results Q3 2012 Companies NKT Cables Nilfisk-Advance Photonics Group Expectations 2012 Questions & Answers
Realised Q3 2012 vs. Q3 2011 Page Page 8 8 mdkk Q3 2012 Q3 2011 Change Consensus Revenue 3.816 3.912-96 -2% 3.970 Revenue, std. metal prices 3.036 3.027 9 3.107 EBITDA (operational) 251 225 26 12% 272 One-off s -12-3 -9-12 EBITDA 239 222 17 260 Depreciation -137-127 -10-129 EBIT 102 95 7 131 Financial items, net -44-106 62-39 EBT from continuing operations 58-11 69 92 Tax from continuing operations -21-13 -8-24 Profit from continuing operations 37-24 61 68 Profit from discontinued operations 0 67-67 0 Profit 37 43-6 68 Oper. EBITDA margin std. 8,3% 7,4% 8,8%
Realised Q3 2012 vs. Q3 2011 Page Page 9 9 mdkk Q3 2012 Q3 2011 Change Revenue 3.816 3.912-96 Revenue, std. metal prices 3.036 3.027 9 EBITDA (operational) 251 225 26 One-off s -12-3 -9 EBITDA 239 222 17 Depreciation/Amortisation -137-127 -10 EBIT 102 95 7 Financial items, net -44-106 62 EBT from continuing operations 58-11 69 Tax from continuing operations -21-13 -8 Profit from continuing operations 37-24 61 Profit from discontinued operations 0 67-67 Profit 37 43-6 Oper. EBITDA margin std. 8,3% 7,4% mdkk Revenue decreased by -96 Metal prices -115 FX changes 98 Acquisitions 0-2% organic growth -79 - NKT Cables 0% - Nilfisk-Advance -4% - Photonics Group -11% mdkk Operational EBITDA increased by 26 NKT Cables Margin 7,0% (Q3 2011: 4,8%) 31 Nilfisk-Advance Margin 10,4% (Q3 2011: 10,7%) -2 Photonics Group and other -3 mdkk Financial items (Q3 2011: -106 mdkk) -44 Net interest expense (Q3 2011: -66 mdkk) -42 Net exchange loss (Q3 2011: -40 mdkk incl. cap. int.) -2
NKT Cables Trends Page Page 10 10 Oper. EBITDA (mdkk) 250 200 150 100 50 0 13,4% 13,1% 12,4% 10,2% 123 191 161 55 Q1-08 Q2-08 Q3-08 Q4-08 8,4% 15 Q1-09 7,6% 145 Q2-09 7,0% 8,0% 118 Q3-09 95 Q4-09 8,9% 7,4% 7,4% 5,9% 60 81 142 46 Q1-10 Q2-10 Q3-10 Q4-10 5,2% 3,9% 29 9 Q1-11 Oper. EBITDA mdkk Oper. EBITDA% LTM Oper. EBITDA% LTM, std. Q2-11 2,7% 3,2% 71 Q3-11 73 Q4-11 3,5% 4,2% 4,8% 40 45 102 Q1-12 Q2-12 Q3-12 14% 12% 10% 8% 6% 4% 2% 0% Realised 0% organic growth in Q3 2012 (Q1-Q3: -6%): Electricity Infrastructure 4% (Q1-Q3: 2%) Construction 0% (Q1-Q3: 2%) Railway -2% (Q1-Q3: -41%) Automotive -25% (Q1-Q3: -18%) Q3 2012 organic growth peer 2%: Energy Infrastructure 3% Industry 3% Buildings 0% 2008 2009 2010 2011 2012 Organic growth - Quarterly (Y/Y) 4% 3% 3% 0% -14% 3% -10% -8% 4% 1% 25% 34% 20% 0% -4% -6% -13% -4% 0% - Annually 3% -7% 16% 1% -6%
Nilfisk-Advance Trends Page Page 11 11 Oper. EBITDA (mdkk) 250 200 150 100 50 0 11,0% 11,1% 11,0% 10,4% 154 193 136 130 Q1-08 Q2-08 Q3-08 Q4-08 Oper. EBITDA mdkk 9,9% 9,2% 9,2% 9,2% 105 125 121 118 Q1-09 Q2-09 Q3-09 Q4-09 10,2% 11,0% 10,9% 10,7% 172 191 129 119 Q1-10 Q2-10 Q3-10 Q4-10 Oper. EBITDA% LTM 10,6% 10,5% 10,8% 11,6% 181 Q1-11 200 Q2-11 160 191 Q3-11 Q4-11 11,7% 11,7% 11,7% 196 208 158 Q1-12 Q2-12 Q3-12 14% 13% 12% 11% 10% 9% 8% 7% Realised -4% organic growth in Q3 2012 (Q1-Q3: -1%): EMEA -1% (Q1-Q3: 0%) Americas -11% (Q1-Q3: -2%) APAC -1% (Q1-Q3: 1%) Organic growth peer -2% in Q3 2012: EMEA -6% Americas -1% APAC 1% 2008 2009 2010 2011 2012 Organic growth - Quarterly (Y/Y) 4% 6% 5% -12% -12% -20% -13% -3% 6% 10% 5% 7% 5% 8% 9% 9% 4% -1% -4% - Annually 1% -13% 7% 8% -1%
Nilfisk-Advance - Gross profit development Page Page 12 12 46% 45% Q3 2010 42,3% Q3 2011 41,8% Q3 2012 42,0% 44% 43% 42% 41% 40% 39% 38% 37% 36% Sep '09 Oct '09 Nov '09 Dec '09 Jan '10 Feb '10 Mar '10 Apr '10 May '10 Jun '10 Jul '10 Aug '10 Sep '10 Oct '10 Nov '10 Dec '10 Jan '11 Feb '11 2009 2010 2011 2012 LTM Mar '11 Apr '11 May '11 Jun '11 Jul '11 Aug '11 Sep '11 Oct '11 Nov '11 Dec '11 Jan '12 Feb '12 Mar '12 Apr '12 May '12 Jun '12 Jul '12 Sep '12 Aug '12 Despite declining revenue and tight world market, the company s gross profit as a percentage of revenue continued to develop positively in Q3 2012
Working Capital (in % of revenue) Group Page Page 13 13 Q3 2011 21,8% 3.106 mdkk Q3 2012 20,4% 3.186 mdkk WC of 3.186 mdkk vs. 2.969 mdkk end Q2 2012 Still high focus area in both NKT Cables and Nilfisk-Advance Strategic target remains 18% in Nilfisk- Advance and <17% in NKT Cables WC decreased to 20,4% (LTM) vs. 20,6% end Q2 2012 NKT Cables decreased to 20,4% (LTM) vs. 20,7% end Q2 2012 Nilfisk-Advance decreased to 20,1% (LTM) vs. 20,2% end Q2 2012
Page Page 14 14 12 months investments in tangible assets (gross) Gross CAPEX in Q3 2012 was 77 mdkk (Q3 2011: 102 mdkk) Other 3% Nilfisk- Advance 25% NKT Cables 72% Investments in intangible assets, etc. in Q3 2012 were 61 mdkk (Q3 2011: 37 mdkk) NKT Cables 32% Other 8% Nilfisk- Advance 60%
Net interest bearing debt Group Page Page 15 15 Q3 2011 Q3 2012 5,0x 4.771 mdkk 2,8x 2.751 mdkk mdkk 5.000 4.500 4.000 3.500 3.000 2.500 Net interest bearing debt, mdkk Net interest bearing debt relative to operational EBITDA 6,0x 5,0x 4,0x 3,0x NIBD of 2.751 mdkk vs. 2.692 mdkk as per 30 June and 4.429 mdkk as per 31 December 2011 End September 2012 net interest bearing debt amounts to 2,8x operational EBITDA (end Q2 2012: 2,5x). Max. NIBD of 2,5x operational EBITDA remains the internal target. 2.000 1.500 1.000 500 0 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 2,0x 1,0x 0,0x Gearing of 49% (Q2 2012: 48%). Max. ratio of 100% remains the internal target. Solvency ratio of 43% (Q2 2012: 41%). Ratio >30% remains the internal target.
Gross debt and Cash Resources Group Page Page 16 16 Gross debt: 40% in DKK (end 2011: 62%), 29% in CZK (end 2011: 18%), 15% in CNY (end 2011: 10%) and the remaining part in EUR, USD & PLN Largest part is at variable interest +/- 1% change in interest will impact net interest with +/- 28 mdkk (end 2011: +/- 34 mdkk) Cash resources: Undrawn facilities of 3,4 bn.dkk + cash of 0,3 bn.dkk. In total 3,7 bn.dkk The debt is not subject to any kind of financial covenants
Cash generation Page Page 17 17 mdkk 1.500 1.300 1.100 900 700 500 300 100-100 -300 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 -500-700 -900-1.100-1.300-1.500 Cash flow - operations LTM Free cash flow LTM Cash flow - investments LTM (excl. acquisitions) Operational EBITDA LTM
Page Page 18 18 Cash flow mdkk Q3 2012 Q3 2011 Q1-Q3 2012 Q1-Q3 2011 EBITDA 239 222 696 599 Financial items, net -44-106 -155-210 Change in working capital -136 301-336 -280 Other -29-3 -82-76 Cash flows from operating activities 30 414 123 33 Acquisition of business activities -3-54 -10-202 Acq. of property, plant and equipment, net -53-100 -208-302 Other investments, net -61-37 -152-104 Cash flows from investing actitivities -117-191 -370-608 Cash flows from operating and investing activities -87 223-247 -575 Change in long- and short-term loans 127-265 -1.680 601 Dividend paid 0 0-48 -47 Cash from exercise of share warrants and minorities 0 0 20 0 Cash flows from financing activities 127-265 -1.708 554 Cash flow from discontinued operations (NKT Flexibles) 0-15 1.961-15 Net cash flow 40-57 6-36
Agenda Page Page 19 19 NKT Group Highlights Q3 2012 Financial results Q3 2012 Companies NKT Cables Nilfisk-Advance Photonics Group Expectations 2012 Questions & Answers
NKT Cables Page Page 20 20 VISION NKT Cables is creating value for its customers by providing solutions with cables
NKT Cables Page Page 21 21 Sales by Customers 2011 Industry 30% Utilities 41% Wholesales 29% Sales by Markets 2011 Denmark Other 27% Asia 13% 9% Eastern Europe 26% Germany 25% Sales by Fields of Applications (Products) 2011 Other Automotive 5% 6% Railway 7% Construction 19% Electricity Infrastructure 63% 63% HV+offshore 33% MV 18% Other 12% Manufacturing and Sales Companies Sales Entities Sales by Customers and Fields of Applications are based on std. metal prices for FY 2011. Sales by Markets are based on market prices for FY 2011.
Nilfisk-Advance Page Page 22 22 MISSION We enable sustainable cleaning worldwide to improve quality of life
Nilfisk-Advance Page Page 23 23 Sales by Customers 2011 Domestic 12% Industrial 36% Commercial 52% Sales by Markets 2011 APAC 12% Americas 24% EMEA 64% Sales by Products 2011 Other sales Service 7% 8% High pressure washers 19% Vacuum cleaners 25% Floor-care 41% All data based on FY 2011 Sales Entities Manufacturing Companies
Photonics Group Page Page 24 24 VISION To lead the way in transforming the Photonics Industry
Photonics Group Page Page 25 25 Sales by entities 2011 Vytran 30% Lios Technology 22% NKT Photonics 48% HQ NKT Photonics HQ Lios Technology HQ Vytran All data based on FY 2011
Agenda Page Page 26 26 NKT Group Highlights Q3 2012 Financial results Q3 2012 Companies NKT Cables Nilfisk-Advance Photonics Group Expectations 2012 Questions & Answers
Expectations 2012 Page Page 27 27 The general economic uncertainty has further slowed the development in organic growth rates compared with expectations in August 2012 mdkk Organic growth Oper. EBITDA Guided August 2012 0% ~1.050 - Reduced expectation -50 Negative Guided November 2012 2-3% ~1.000 Expected Group profit is unchanged at around 1,6 bndkk
Agenda Page Page 28 28 NKT Group Highlights Q3 2012 Financial results Q3 2012 Companies NKT Cables Nilfisk-Advance Photonics Group Expectations 2012 Questions & Answers
Q&A Page Page 29 29