Q2 2024 Nkt A/S Earnings Call Transcript
Key Points
- NKT AS (NRKBF) reported strong operational and financial results in Q2 2024, with double-digit growth in revenue and operational EBITDA for the seventh consecutive quarter.
- The company achieved organic revenue growth of 29% compared to Q2 last year, driven by positive contributions from all three business lines.
- NKT AS (NRKBF) recorded a quarterly record operational EBITDA of EUR 86 million, equivalent to a margin of 14.2%, which was 1.8 percentage points higher than the previous year.
- The high-voltage order backlog remained robust at EUR 11.3 billion, providing strong earnings visibility for the remainder of the decade.
- Strategic progress was made with the successful divestment of Photonics and the acquisition of SolidAl, enhancing NKT's market-leading position in power cable solutions.
- Despite higher revenue, the operational EBITDA margin in the service & accessories business line decreased to an unsatisfactory level of 7.1% in Q2 2024.
- Profitability was impacted by an increased cost base, reflecting higher employee headcount and work related to a legacy service agreement executed at a low margin.
- The company faces challenges in expanding production capacity, including cost overruns, delays, and difficulties in attracting and retaining skilled labor.
- There is uncertainty regarding the timing of when a structurally larger supply chain will materialize, potentially affecting future market balance.
- The financial outlook for 2024 includes assumptions of stable market conditions and satisfactory execution, which may not account for potential economic disruptions or supply chain issues.
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Thank you. Good morning to everyone, and thank you for joining us on the call today. My name is Claes Westerlind, I'm the CEO, and I will have the privilege of presenting NKT's results for the second quarter of 24 due today. Next to myself, I also have our esteemed CFO, Line Fandrup, who, later on in the call, will take an in-depth look at our financial performance in Q2 and also throughout the first six months of the year.
Before we go into the presentation, I want to draw your attention to the regular disclaimer that both the presentation for myself and Line, together with this material that it's containing forward-looking statements. And with that, turning now to our key messages for the quarter.
Overall, we recognized strong operational and financial results in Q2 with continued double-digit growth in revenue and operational EBITDA for the seventh consecutive quarter, driven by positive contributions from all three business lines. We
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