NKT reports strong Q4 cash flow despite soft guidance

NKT, the Danish power cable manufacturer, reported strong fourth-quarter cash flow on Wednesday, February 25, 2026, despite issuing soft guidance for the upcoming year, as the company navigated a challenging market environment with mixed financial results. The company posted fourth-quarter revenue at standard metal prices of EUR 643 million, falling short of analyst estimates of EUR 669 million, while operational EBITDA of EUR 85 million also missed the EUR 89 million consensus. However, fourth-quarter free cash flow significantly exceeded expectations at EUR 341 million compared to analyst estimates of negative EUR 59 million, driven by lower capital expenditure and resulting in net cash reaching EUR 963 million with leverage at negative 2.5x. The company's performance was mixed across its business segments, with an organic revenue decline of 8% in the quarter primarily due to an expected ramp-down in its Solutions business, which saw revenues fall 13% organically as the Champlain Hudson project wound down. In contrast, Applications revenue grew 9% with increased capacity in power grids, while Services & Accessories surged 31% on higher repair work activity. For the full year 2025, NKT achieved record operational EBITDA of EUR 390 million on revenue of EUR 2,722 million, representing 6% organic growth, with net result reaching EUR 275 million, up from EUR 236 million in 2024. Despite the strong full-year performance, NKT issued conservative guidance for 2026, targeting revenue at standard metal prices between EUR 2.63 billion and EUR 2.78 billion, with operational EBITDA of EUR 360 million to EUR 410 million. The midpoint of these guidance ranges falls 2% below consensus on revenue and 6% below on EBITDA, with analyst consensus sitting at EUR 2.75 billion for revenue and EUR 410 million for operational EBITDA. Nevertheless, the company maintains a robust order backlog, with its high-voltage order backlog standing at EUR 10.2 billion, stable year-over-year, excluding booking commitments worth over EUR 3.5 billion. President and CEO Claes Westerlind emphasized that 2025 was 'another strong year for NKT, defined by disciplined execution and continued progress on strategic priorities,' highlighting improved financial performance, maintenance of the company's leading position in the power cable industry, and progress on investments in capacity expansion for future growth.