Interim financial report - 2nd quarter 2008

SUMMARY25 August 2008,  Announcement 19Satisfactory quarter with more difficult market conditions With Group revenue of 3,789 mDKK (+5% compared with 2nd quarter 2007),operating income (EBIT) of 377 mDKK (+14%) and Group net income before tax of309 mDKK, earnings development has been satisfactory compared with the sameperiod in 2007. Overall, organic growth of 4% was realised in 2nd quarter 2008.“Business as usual” in the 1st quarter has been succeeded by the prospect ofmore uncertain market conditions in the 2nd half which are expected to affectNKT Cables negatively in relation to our latest forecasts. For NKT Cables, 2nd quarter growth in revenue has not lived up to expectations,and the low voltage markets in Eastern Europe in particular are showing signsof slowdown and increasing competition. To this must be added unchangedexpectations with regard to a normalisation of the low voltage market inDenmark during 2nd half 2008. The expectations of a reduced level of activityin the low voltage segment have led to an adjustment being made to the workforce in the Czech Republic. The high voltage market appears still very strong,but the effect of this is not sufficient to compensate for the fall in the lowvoltage segment, among other things because this segment cannot be providedwith additional capacity before the new factory in Cologne is ready forproduction in 2009. For Nilfisk-Advance the results for the 2nd quarter are satisfactory. Theassessment for the 2nd half is that market growth is falling and pressure onearnings is rising. This has led to our decision to now implement a number ofstructural and other adjustments to the company's business systems with a viewto maintaining an attractive level of earnings.  For NKT Flexibles, developments continue to be very positive and a very fineperformance was achieved in the 2nd quarter. For the NKT Group, expected net income for 2008 before tax and restructuringcosts remains unchanged at around 950 mDKK, which corresponds to the revisedforecast after the 1st quarter. As stated, the decision has been taken to address the more negative marketsituation at Nilfisk-Advance by introducing a number of structural and otheradjustments. These measures will entail implementation costs totalling around75 mDKK, of which 50 mDKK will affect 2008 and the remaining 25 mDKK willaffect 2009. These measures will have a positive impact on earnings of around75 mDKK, the full effect being expected in 2010. Provision has not previouslybeen made for this initiative, which will mean that expected overall Group netincome before tax is reduced to around 900 mDKK. Should market conditions in 2nd half 2008 deteriorate markedly in relation topresent possible estimates, it is expected that earnings could be reduced byaround 50 mDKK.