Germany: NKT EBITDA Up 5 pct
NKT’s revenue increased by 1,153 mDKK to 15,604 mDKK - the highest level in the history of NKT. Nilfisk-Advance and Photonics Group realised organic growth in revenue of 8% and 16% respectively, surpassing even the 2010 growth rates, while NKT Cables exceeded last year’s organic growth in revenue by only 1%.
The operational EBITDA for the NKT Group increased by 51 mDKK to 1,036 mDKK. Nilfisk-Advance, NKT Flexibles and Photonics Group all posted positive income growth, but the income for NKT Cables was smaller than expected. In the 1st half of the year it took NKT Cables longer than first anticipated to close down the existing factory and to implement production in the new factory in Cologne, and in the 2nd half of the year the production of wires for high speed railways in China had to be temporarily suspended due to organisational changes by the customer - the Chinese Railway Ministry. NKT Cables’ income was negatively influenced by both developments. With a new management and a programme of excellence focused on efficiency, productivity and safety throughout the organisation, earnings for NKT Cables are expected to rise in 2012.
In 2011 important strategic goals were achieved in ‘Powered by NKT’, NKT’s strategic plan for the period 2011-2015. Despite the European debt crisis and its impact on the European economies in particular, the megatrends on which the strategy is based continue to drive developments. In NKT Cables, strong demand was experienced in Electricity Infrastructure for land and submarine cables and orders are at a record level. Nilfisk-Advance continued to expand in the emerging markets, and customer relations in the mature markets were strengthened. Photonics Group achieved an important breakthrough with regard to oil and gas industry customers and strengthened its market position through increased sales focus and product development. NKT Flexibles realised an important strategic goal with the signing of a billion-kroner contract with Petrobras and commenced the subsequent work of setting up production in Brazil.
NKT’s strategy builds on active ownership, and in 2011 a strategic study was initiated to determine whether an alternative ownership structure would take NKT Flexibles further than the present joint venture between NKT (51%) and Subsea 7 (49%). In February 2012 agreement was signed concerning sale of NKT Flexibles to the US company National Oilwell Varco for 3.8 bnDKK and the transaction is expected to be finally completed in the 1st half of this year.
NKT has in recent years invested more than 2 bnDKK in NKT Cables to turn focus towards major infrastructure projects in the energy sector. In 2011 alone, 617 mDKK has been invested. In the 2nd half of 2011 the investment in i.a. factories in Germany and China began to demonstrate the economic development expected.
Nilfisk-Advance continued to invest in product development.
NKT expects organic revenue growth of approx. 5-10% in 2012. It is planned to realise an operational EBITDA of 1,050-1,250 mDKK in 2012, which after adjustment for the sale of NKT Flexibles is an operational improvement of up to 400 mDKK on 2011.
Furthermore, the NKT Group’s share of profit from the sale of NKT Flexibles will contribute to fulfilment of the Groups own debt targets. It is expected that the ratio of interest bearing debt to operational EBITDA will be approx. 2x at end-2012. NKT will therefore be well-equipped for the future.
Offshore WIND staff, March 05, 2012; Image: nktcables