Q2 2026 Nkt A/S Earnings Call Transcript
Key Points
- Operational EBITDA margin improved to 15.7% in Q2 2026, up from 14.5% in Q2 2025, despite a 9% decline in organic revenue.
- Transmission business line achieved a record-high operational EBITDA margin of 20.2% in Q2 2026, driven by solid execution and favorable project mix.
- The Champlain Hudson Power Express project reached commercial operation, a major milestone that enables transmission of hydropower to New York City.
- Transmission order backlog remained high at EUR13 billion, providing strong long-term visibility and confidence in future revenue.
- Grid Solutions and Accessories delivered strong organic growth of 15% in Q2 2026, with improved profitability and margin expansion.
- The company raised its full-year 2026 operational EBITDA guidance to EUR400-430 million, reflecting solid execution and confidence in the remainder of the year.
- NKT Eleonora, a new installation vessel, was launched and is on track to become operational in 2027, strengthening installation capabilities.
- The medium voltage capacity expansion in Denmark was completed, and the Portugal expansion is on track for end-2026, supporting future growth in distribution.
- Organic growth was negative at -9% in Q2 2026, driven by lower revenue from the Champlain Hudson Power Express project as it reached commercial operation.
- Cash flow from operating activities was negative at EUR145 million in Q2 2026, impacted by a significant working capital outflow of EUR225 million.
- Free cash flow was negative at EUR249 million in Q2 2026, reflecting high investment levels and working capital phasing.
- Distribution business line saw a decline in operational EBITDA to EUR27 million from EUR31 million in Q2 2025, due to higher material costs and ramp-up costs.
- The company expects a margin dilution of up to 2 percentage points from increased costs related to ongoing investments and production ramp-up.
- Working capital development was negative, driven by phasing between milestone payments and project execution, leading to a reduction in net cash position to EUR591 million.
- The transmission order backlog slightly decreased from EUR13.5 billion at Q1 to EUR13 billion at Q2, due to product execution during the quarter.
- Revenue guidance for 2026 was narrowed, with the midpoint unchanged, indicating no significant improvement in revenue expectations despite the EBITDA upgrade.
Welcome to NKT interim report for the first half of 2026 conference call.
For the first part of this call, all participants will be in a listen-only mode. Afterwards, there will be a question-and-answer session. To ask a question during the Q&A, please press five star on your telephone keypad. Today's call is being recorded. I'll now hand it over to the speakers, CEO Klaus Westerlin and CFO Michael Young. Please begin.
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Good morning, everyone, and welcome to the presentation of NKT's interim report for the first half of 2026. My name is Klaus Westerlin, the CEO, and here in the room together with me, I also have our CFO, Michael Young.
As usual, I will take you through the key developments, business highlights and performance for the second quarter and first half of the year. Then I will hand over to Michael, who will walk you through the financials and we will conclude the call by looking at the
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