Danske Bank: NKT – Q3 21 initial comment

Quick take fra Danske Bank på regnskab fra NKT:

NKT (OW) is out with a solid Q3 21 result that lined up perfectly with the pre-announced result from last month. On the back of solid recovery post covid-19, leading to higher deliveries and a hefty reduction in the order backlog, NKT was able to grow is clean EBITDA by 114% y/y. This was driven by growth in both the high voltage segment, but also the services and medium & low voltage segments. Encouragingly, NKT Photonics also demonstrated a strong recovery trajectory, which remains important for NKT’s credit case, as this segment might be up for sale in the short term. Due to the strong result, NKT’s operating cash flow was seasonally very strong, which caused group net debt to decline to EUR97m (down 48% q/q). Subsequently we see net debt to EBITDA improving to 0.7x from 1.7x last quarter. This, strong level, coupled with a healthy cash position of EUR110m, affirms our view, that there is virtually no risk of NKT not calling its outstanding hybrids with 1^st call date in September next year. Overall, we see the result as being in line with expectations and slightly credit positive.