Interim Report, 1st quarter 2011

NKT realized organic growth in revenue of 13%, thereby supporting expectations. Earnings for Nilfisk-Advance and NKT Flexibles were as expected while additional costs incurred by NKT Cables on a submarine cable project negatively influenced the NKT Group's overall earnings

Summary
Revenue increased by 712 mDKK to 3,774 mDKK, corresponding to organic growth of 13% and nominal growth of 23%. The NKT Group’s solid organic growth was principally driven by the Electricity Infrastructure and Railway segments of NKT Cables which realized organic growth rates of 30% and 29%, respectively. Nilfisk-Advance also contributed with organic growth of 5%.  

Despite improved earnings for Nilfisk-Advance and NKT Flexibles, events at NKT Cables reduced operational EBITDA for the NKT Group to 221 mDKK, a fall of 14 mDKK on 1st quarter 2010. As stated in the 2010 Annual Report, the early part of 2011 in particular was negatively impacted by the relocation and running-in of equipment at NKT Cables. Added to this, an operating loss of 58 mDKK was incurred on a major submarine cable project. The cable system entered service with the customer at end-March. Calculated in standard metal prices, operational EBITDA margin on a rolling 12-month basis (LTM) comprised 8.2% at 31 March 2011, compared with 8.6% at 31 December 2010.  

Due among other things to a rising level of activity, working capital increased by 501 mDKK to 3,498 mDKK at 31 March 2011 (20.5% LTM).  

Net interest bearing debt increased by 716 mDKK, primarily as a result of the rise in working capital and investments.  

NKT Cables realized organic growth of 20%, corresponding to revenue of 1,268 mDKK measured in standard metal prices (1st quarter 2010: 1,036 mDKK). EBITDA was 29 mDKK (1st quarter 2010: 60 mDKK) and was influenced by the additional costs of 58 mDKK relating to the loss-making submarine cable project.

Nilfisk-Advance reported organic growth of 5% (nominal growth of 9%), corresponding to revenue of 1,552 mDKK (1st quarter 2010: 1,418 mDKK). Operational EBITDA increased by 9 mDKK to 181 mDKK (1st quarter 2010: 172 mDKK) as a result of the growth in revenue combined with rising raw material prices.  

NKT Flexibles realized growth of 83%, corresponding to revenue of 397 mDKK (1st quarter 2010: 216 mDKK). This must be seen in the light of low sales in the comparative period. EBITDA increased by 80% and comprised 72 mDKK (1st quarter 2010: 40 mDKK).  

Expectations for 2011 remain unchanged, with anticipated organic growth in revenue of approx. 5% and EBITDA of approx. 1,200 mDKK, (the 2010 Annual Report). This is notwithstanding the cost overruns on the loss-making submarine cable project. NIBD/operational EBITDA is expected to be unchanged at approx. 3.5x end 2011.