NKT A/S Annual Report 2023: 36% organic growth and record-high operational EBITDA
Company Announcement
21 February 2024
Announcement No. 3
NKT A/S Annual Report 2023: 36% organic growth and record-high operational EBITDA
NKT CEO Claes Westerlind, on 2023 performance:
- 2023 was a successful year for NKT with organic revenue growth of 36% and the highest annual operational EBITDA in company history. Demand for high-voltage power cable systems was unprecedented during the year. This led to a record order intake bringing our high-voltage order backlog to EUR 10.8bn and the launch of an approximately EUR 1bn investment program. We enter 2024 with a robust financial position that forms the foundation for further improvement of financial performance.
Financial highlights
| EURm | Q4 2023 | Q4 2022 | 2023 | 2022 |
| Revenue | 536* | 389* | 1,927* | 1,447* |
| Organic growth | 40% | 35% | 36% | 15% |
| Operational EBITDA | 63.2 | 39.7 | 254.6 | 154.5 |
| Operational EBITDA margin | 11.8%* | 10.2%* | 13.2%* | 10.7%* |
* Std. metal prices
2024 financial outlook
Revenue (in std. metal prices) is expected to be approx. EUR 2.21-2.36bn and the operational EBITDA is expected to be approx. EUR 285-335m.
The financial outlook is based on several assumptions including:
- Satisfactory execution and development of high-voltage investments and projects without major disruptions
- Stable market conditions in Applications
- Normalized offshore power cable repair activity
- Stable development of the global economy
- Stable supply chain with limited disruptions and access to the required labour, materials and services
- Stable development in foreign currency and metal prices
High growth in revenues and operational EBITDA driven by Solutions and Applications
In 2023, NKT achieved revenues (in std. metal prices) of EUR 1,927m, equalling organic revenue growth of 36% compared to 2022, which was driven by further growth in Solutions and Applications. Increased revenues and efficiency initiatives led to the highest annual operational EBITDA in company history. NKT’s net result from continuing operations for 2023 amounted to EUR 118.7m, an increase of EUR 63.6m from 2022. Furthermore, free cash flow increased, driven by a larger positive EBITDA contribution and improved working capital position. This more than offset a higher investment level.
In Solutions, NKT posted organic growth of 59%. This was driven by satisfactory execution of orders awarded in recent years covering several power cable solutions; as well as a previous capacity expansion investment program that contributed to financial performance. Higher revenues and a continued focus on profitability saw operational EBITDA increase to a new high of EUR 182m in 2023 from EUR 106m in 2022.
NKT achieved a record-high annual order intake of EUR 7bn in 2023 driven by project awards across Europe, primarily based on DC technology. In May 2023, NKT launched the largest investment program in company history, which will see investments of approx. EUR 1bn to increase capacity and capabilities when assets gradually become operational from 2027. Exiting 2023 with a high-voltage order backlog of EUR 10.8bn, Solutions will continue to focus on execution, and is well positioned to meet demand for high-voltage power cable systems.
In 2023, Applications improved its financial performance, posting 15% organic growth in revenues and an operational EBITDA that more than doubled compared to 2022. Profitability continued to strengthen, driven by demand for power grid and renewable energy technology, as well as previously launched efficiency initiatives. Applications concluded 2023 with an operational EBITDA margin of 9.2%, compared to 5.2% in 2022.
In Service & Accessories, the organic growth was -2% in 2023. The development reflected limited offshore repair work within the Service business, but positive developments within Accessories. As a result, operational EBITDA decreased to EUR 18.6m in 2023 from EUR 25.7m in 2022.
NKT demonstrated continued commitment to sustainability
In 2023, NKT continued to execute on its sustainability strategy, including the roadmaps aligned with the corporate decarbonization targets for 2030, which were approved and validated by the Science Based Target initiative in September 2023. NKT is progressing as expected and continues to advance towards its commitments of increasing the positive impacts of its products and solutions, minimizing environmental impacts, strengthening diversity and inclusion, and fostering an inclusive corporate culture.
Teleconference
NKT A/S hosts a teleconference for investors and financial analysts at 10:00am CET on 21 February 2024. The presentation to be used during the call will be available before the start of the teleconference. To attend, please register and access on investors.nkt.com.
Contacts
Investor Relations: Michael Nass Nielsen, Head of Investor Relations, Tel.: +45 2494 1654
Media Relations: Louise Westh Naldal, Head of Group Communications, Tel.: +45 2982 0022
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