NKT invests in high-voltage power cable business to prepare for future growth and upgrades medium-term financial ambitions

Company Announcement

24 May 2023
Announcement No. 18

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NKT invests in high-voltage power cable business to prepare for future growth and upgrades medium-term financial ambitions

Since March 2023, NKT has announced high-voltage project awards and firm commitments accumulating to approx. EUR 5bn. To deliver on this significant order intake as well as a continued strong market outlook, NKT will invest in additional high-voltage production and installation capabilities and capacity. This leads to an upgrade of NKT’s medium-term financial ambitions.      

The high-voltage power cable market has grown significantly in recent years and the outlook remains positive driven by the transition to renewable energy and electrification of societies. Several countries have ambitious offshore wind targets and Europe aims for at least 300 GW offshore wind generation by 2050.

NKT estimates that the value of projects awarded in its addressable high-voltage power cable market was around
EUR 5bn in 2021 and around EUR 8bn in 2022. For 2023 and 2024, NKT estimates the project awards in the market will be at least EUR 8bn on average per year, however, it could be significantly larger, depending on the development of several sizable projects including multi-year frame agreements.

The projects awarded in recent and coming years will be executed over a period of several years following the awards and will provide long-term backlog visibility for power cable suppliers. At the end of Q1 2023, NKT’s high-voltage order backlog increased to EUR 7.0bn from EUR 4.7bn at end-2022 and EUR 2.9bn at end-2021. This significant increase is a testimony of trust from customers in NKT as a long-term, reliable partner in large high-voltage projects.

As announced in Company Announcement no. 14 of 5 May 2023, NKT has initiated the investment in additional production and installation capacity and capabilities on the existing, market leading production site in Karlskrona, Sweden.

Investments in end-to-end HVDC factory and market leading cable-laying vessel
The new high-voltage investments to improve turnkey capacity and capabilities, will include a significant expansion of the production site in Karlskrona, Sweden, and a new market leading vessel with record-high power cable-laying capacity compared to vessels in the existing world fleet. The production site expansion will entail building a new factory including a third 200m extrusion tower. The expansion will add end-to-end production capacity next to the existing facility and turn Karlskrona into the world’s largest high-voltage offshore cable production site. The expansion will further improve NKT’s abilities to meet the growing demand for especially long-length HVDC power cable solutions.