NKT (NKT) Q2 2024 earnings summary

Executive summary

• Achieved double-digit revenue and operational EBITDA growth for the seventh consecutive quarter, with organic revenue up 29% and operational EBITDA at EUR 86 million and a 14.2% margin, driven by all business lines.

• Strategic progress included the divestment of NKT Photonics and the acquisition of Solidal/SolidAl, enhancing focus on power cable solutions and providing a platform for future growth.

• High-voltage order backlog remained robust at EUR 11.3 billion, providing strong earnings visibility.

• Free cash flow reached EUR 398 million in Q2 2024, supported by higher earnings and favorable working capital.

• Major investments underway, including EUR 1 billion in Karlskrona and EUR 100 million across multiple sites to expand capacity.

Financial highlights

• Q2 2024 revenue at standard metal prices was EUR 605 million (up from EUR 468 million in Q2 2023), with H1 2024 revenue at EUR 1.1–1.5 billion, reflecting 29% organic growth.

• Operational EBITDA for Q2 2024 was EUR 86 million (Q2 2023: EUR 58 million), with a margin of 14.2%.

• Net result from continuing operations was EUR 75 million in Q2 2024, up EUR 40 million year-over-year.

• Free cash flow was EUR 398 million in Q2 2024, or EUR 542 million excluding acquisitions and divestments.

• Divestment of Photonics contributed EUR 104 million from discontinued operations.

Outlook and guidance

• 2024 revenue guidance raised to EUR 2.33–2.43 billion, with operational EBITDA guidance increased to EUR 310–345 million, reflecting expected Solidal/SolidAl contribution.

• Assumptions include satisfactory project execution, stable market and supply chain, and stable economic and currency conditions.

• Effective tax rate expected around 15% for 2024 due to continued capitalization of tax loss carry forwards.