Interim Report - 3rd quarter 2009

24 NOVEMBER 2009, ANNOUNCEMENT NO. 15With revenue of 2,981 mDKK and operational EBITDA of 263 mDKK, operatingperformance for 3rd quarter 2009 was in line with expectations. The structuralinitiatives introduced continue to yield positive results, but the marketconditions remain challenging. Expected operational EBITDA for 2009 has nowbeen revised from previously 700-900 mDKK to not less than 850 mDKK. SUMMARYNet revenue for the 3rd quarter corresponds to negative organic growth of 12%compared with 3rd quarter 2008. With revenue of 8,760 mDKK (10,683 mDKK in2008), organic growth for 2009 to date is -11%. The main reason is thechallenging market conditions. The NKT Group is exposed in industries in whichmaterial signs of improvement are yet to be seen. There is continued lowvisibility in these business units, although the world economy has reportedlyentered a stabilization phase. The strategy is to continue the expansionary andstructural measures in both units and to utilize the opportunities presented bye.g. customer investment in infrastructure. Operational EBITDA in the 3rd quarter comprised 263 mDKK, a fall of just over100 mDKK (360 mDKK in 3rd quarter 2008). The fall in earnings was primarilyattributable to declining revenue in NKT's core segments and lower profits inNKT Flexibles. Strong focus remains on effective completion of therestructuring measures initiated to improve earnings margins, and this ishaving positive influence on results. EBITDA margin for 3rd quarter 2009 was10.7%, (12.8% for the same period in 2008). Cash flow from operating activitiesand working capital have improved both in relation to 3rd quarter 2008 and 2ndquarter 2009. At 30 September 2009 working capital had been reduced against 30September 2008 by more than 1 bnDKK. Interest bearing debt has increased byapprox. 100 mDKK against 30 June 2009 as a result of investment in the newcable factory in Cologne. NKT's overall capital resources are unchanged atapproximately 2.5 bnDKK, and the Group's debt remains independent of financialcovenants. NKT expects to be in strong shape ready to capture market shares andincrease earnings margins when demand rises. NKT Cables realized organic growth of -10% for the 3rd quarter and -7% for theyear's first nine months. EBITDA margin (LTM) further decreased to 7% in the3rd quarter (7.6% in the 2nd quarter.) This was due to declining demand andthus also increasing competition in the medium and low voltage segments. Asexpected, the running-in of the new high voltage factory in Cologne led to anumber of additional costs. With the acquisition of a high voltage factory inChina from 1 January 2010, capacity in this segment will be increased,strengthening NKT Cables' position in the Chinese market. The demand in Chinafor catenary wires continued in the 3rd quarter and this segment now representsapprox. 14% of NKT Cables' revenue for the year to date. Nilfisk-Advance reduced the decline in revenue with organic growth of -13% forthe 3rd quarter, (-16% for 1st half 2009). An EBITDA margin (LTM) of 9.2% wasmaintained in 3rd quarter 2009, similar to the level at the end of the 2ndquarter. This shows that the company is succeeding in lowering costs and at thesame time maintaining gross profit. Product development continues at the samehigh level as previously. Based on development in results over the past nine months, final expectationsfor 2009 have now been adjusted. Anti-cipated organic growth is unchanged atapprox. -10%, while the forecast for operational EBITDA has now been revisedfrom previously 700-900 mDKK to not less than 850 mDKK.