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Investing.com -- NKT (CSE:NKT) shares jumped more than 13% on Wednesday after the Denmark-based cable manufacturer reported third-quarter results that exceeded expectations and announced new financial ambitions for 2030.
The company posted revenue at standard metal prices of €726 million in the period, coming in 8% ahead of consensus estimates of €674 million.
Organic growth reached 11%, compared with expectations of 2%. The Solutions division was 9% ahead of expectations, Applications was 1% ahead and the Services & Accessories division beat forecasts by 47%, supported by what Jefferies described as a “large one-off repair.”
Operational EBITDA was €119 million, 22% above the consensus estimate of €98 million, resulting in a margin of 16.4%. Solutions EBITDA was 11% ahead of expectations, while Applications was 3% below. Services & Accessories exceeded expectations by 115%.
Jefferies said that EBITDA in the Services & Accessories division almost quadrupled from a year earlier, with margins 10 percentage points higher, reflecting the impact of the repair work.
The company’s free cash flow for the quarter was at negative €102 million, slightly ahead of the negative €108 million consensus, as capital expenditure continued to rise with its investment program.
Net cash fell to €640 million from €757 million in the previous quarter. Total available liquidity was €1.28 billion, compared with €1.39 billion in the second quarter. Jefferies said management noted that progress on new capacity “is still going according to plan.”
NKT confirmed its full-year 2025 outlook, projecting revenue at standard metal prices between €2.65 billion and €2.75 billion and operational EBITDA between €360 million and €390 million.
Analyst consensus at the time of the report was €2.69 billion and €380 million, respectively. Jefferies said that the absence of a guidance increase appeared “quite cautious,” citing implied fourth-quarter EBITDA of €85 million at the top of the range.
The high-voltage order backlog reached €10.4 billion, up 3% from the second quarter. The backlog figure excludes more than €3.5 billion in booking commitments.
NKT is aiming for an organic revenue CAGR of more than 7% from 2024 to 2030 and operational EBITDA above €900 million by 2030, which Jefferies noted is 10% above Visible Alpha consensus of €817 million.
The company also targets ROCE above 22%, at least €3.74 billion in revenue and EBITDA margins of about 24% by 2030.
Capex as a percentage of sales is projected to fall to 4% after 2028, with no major investments planned beyond that point. The group expects to maintain a net cash position and considers this a pathway to future capital return opportunities.