Thank you, gentlemen. Thank you for standing by, and welcome to the NKT Q2 Report 2020 conference call. At this time, all participants are in the listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star one on your telephone. I must advise you that this conference is being recorded today on Wednesday, the 19th of August, 2020. I would now like to turn the conference over to your first speaker today, Alexander Kara. Please go ahead.
Yeah, good morning, everybody. Thank you that you will take the time to listen to our Q2 report of NKT. I have here in the room with me Line Andrea Fandrup, my new CFO, who has just joined some days back on the 10th of August, and she will just say in some minutes a little bit about herself. Then we have Basil Garabet in the room here, President and CEO of NKT Photonics, and Michael Nass Nielsen, Head of Investor Relations, who will today answer the financial question as Line just joined a few days ago, and I'm happy that she is here and good that she's here. And with this, I want to hand over to her so she can say some words about herself.
Thank you, Alex, and good morning, everybody here on the call and listening in. I am very excited to be here. It is officially my eighth working day, so being absolutely new to NKT. I'm sure many of you have read up on a little bit on my background, but anyway, just to give you a short version of that, I come from a career of international companies across different businesses. So I've been a part of shipping, I've been a part of biotech, innovation pipelines, production, professional services, large projects around the world, and lately I was part of the Rockwool capital-intensive industry and the full production chain of that. So I was happy when NKT approached me, listening into the business here and the different pillars we have. It has a lot of similarities to what I've done so far.
I must say I'm encouraged by the first days in the job, but also very encouraged about the wins over the spring and summer. Happy to be on board and work with Alex and the rest of the team. Thank you.
Okay, thanks, Line. So then we go to the highlights of the quarter, and I would say the quarter two was a satisfactory quarter in line with our expectation, whereas I have to say application exceeded our expectation. So overall, good revenue growth, 15% organic growth, which was supported by all the business lines, which I think is a nice achievement, and 16 million EUR EBITDA operational is satisfactory. Further, we have a nice run of some good orders. We could grow the order backlog from end of Q2 of around 1.2 billion EUR up to around 2.7 billion EUR. That is more than doubling the order backlog with some major wins, and they come to those in a minute. It is, I think, a big achievement. Going now to the next slide already, and here the first two orders, SüdOstLink and SüdLink, which is part of the German corridor project.
I think that is excellent that NKT can participate in a German energy event and as a German citizen and citizenship, proud to that we can continue or participate in this great project. That was a big achievement and hard work to get there. Further, we were successful in Greece with the Attica-Crete project, the interconnector from Greece mainland to Crete where we participate. After the Q2, we received some more orders for Shetland, interconnectors from Shetland mainland to Shetland, around EUR 235 million, DC extruded cable, and also then just recently from TenneT's BorWin5 for offshore wind, which is below EUR 250 million. That was also a nice start into Q3.
Looking at the solution, we had a nice growth of 21% here, organic growth, overall good execution of the project, and we finalized two AC projects, Gina Krog, which is an AC project between two platforms from Equinor, and then the Öresund, which is an AC cable between Denmark and Sweden. In both projects, we used the NKT Victoria to lay the cable, and further, we used also the Victoria in one repair job for the Baltic Cable. Going to the next, I think overall the first half of 2020 was a great year for the cable industry, which is positive for all the cable manufacturers with more than EUR five billion orders which have been awarded, and we got our good share out with EUR 1.6 billion, the three projects which I mentioned before, and followed by almost EUR 500 million with BorWin5 and Shetland.
I think this is a great achievement. We are still busy and work on our teams on several tenders, different market segments, and also geographies. And so, in fact, the tender work has not slowed down due to the coronavirus pandemic. It's just maybe a little bit more difficult to deal with all this Skype and Teams and you name it, tools for all the meetings, but otherwise it works. So the outlook is still attractive, medium and long term, so nothing has changed compared to the previous quarter. And going to the backlog, you see how the backlog is distributed, all-time high, EUR 2.7 billion end of Q2, and end of Q3, we will be more than EUR 3 billion due to the recent Shetland and BorWin5 orders received.
We are active in all the segments, offshore wind, interconnectors, oil and gas, and then with these new orders, we continue here to work on it. Coming to applications, applications is, as I mentioned in the early beginning, above our expectation. 10% organic growth, I think, is a remarkable achievement in these unpredictable times of the corona pandemic, so we have seen some good growth in Germany, Netherlands, Eastern Europe, but also some countries where some were difficult, like U.K and France, which were closed, but this was compensated by others. So our high revenues, good growth, good earnings, so our actions which we have taken in productivity, product mix is showing results, and we got also some nice medium voltage frame contracts in Q2.
I have appointed also a new head of applications with a solid track record in the cable industry, Will Hendrikx, and we will continue here on a good journey with applications. Going to service and accessories, accessories is developing well, in particular on the medium voltage side, and we deliver in the different countries, also in the Middle East. Service was also a good quarter, even a little bit down compared to a strong comparison of last year. Quarter, we repaired the Baltic Cable very fast in 29 days, which is, of course, important as the power should be transmitted again as fast as possible. And also here, I have hired a new head of accessories, Fredrik Eskengren. So overall, we are on a good track on growth, on revenues, on orders.
I would conclude then before I hand over to Michael. I would say we are on the way up. And with this, I would hand over to Basil, sorry, and he will now give you insight in Photonics.
Thank you, Alex. Good morning. I'd like to welcome Line as well to the team. Great addition. Q2 for us was a quarter that was heavily influenced by COVID. Our revenue came in at EUR 14.6 million, which is down on the EUR 17.9 million we did in the same quarter in 2019. Again, the main effect that we had was on our industrial segment of our business. Organic growth is at -20%, again, mainly driven by the impact on the industrial segment. However, both our medical and life sciences and our aerospace and defense businesses showed satisfactory growth, actually very positive growth in both segments. EBITDA came in at -EUR 0.8 million, which is down from EUR 3.9 million the same quarter of 2019, mainly driven by the lower revenue. We have very much high margin business, so revenue going down will drive the lower EBITDA.
Order intake for the quarter, again, impacted heavily by COVID, came in at - 26%, mainly due to the high intake of the same quarter in 2019, which was affected by large aerospace and defense projects. However, orders in the medical and life sciences and industrial segments were actually on par of what we did in 2019. The industrial segment, which is still the largest segment of our business, comprises 70% of our revenue, and as I mentioned before, has been heavily impacted. Not all segments in the industrial side have been impacted, but some are very low at this stage. We do see improvements going in and have been from June onwards, but the quarter was impacted because of that. In light of these consequences, NKT Photonics have adopted several measures to keep costs down. However, the company does prioritize growth at this stage.
We are still in the growth industry, and most of our actions are there to enable that growth in the markets that we serve. Return to the next slide on the business development. In the medical and life sciences, which is 15% of our revenue, the revenues grew satisfactory, and the primary growth drivers were within our bioimaging and microscopy side, as well as ophthalmology. We manufacture lasers for cataract operations and other ophthalmology applications. In industrial, which is 70% of our revenue, we have been experiencing headwinds, and that did get worsened by the coronavirus pandemic. We are working with a number of customers to support future growth, and we see that turning around, especially in areas such as Asia, turning around from the effects of the pandemic. In aerospace and defense, business is doing very well. We are getting new contracts.
Both the revenue and order intake is improving dramatically in those areas, and we see that as a future revenue and EBITDA performer that will help us go forward. On that, I pass on, since I finished my segment, to Michael.
Great, Basil. Thank you very much, and I would also like to welcome all on the call. As Alexander mentioned in the beginning, I'll do the financial section today, given the fact that we've only had Line here for eight working days, and then I promise you that she'll be ready to do the presentation when we'll meet here again in November. Let's start out on slide 18, where you have a bridge on how the revenue developed during Q2. Revenue has been driven upwards by the development in NKT. The organic growth contribution of 15% much more than outweighed the headwinds that we've seen in NKT Photonics during the quarter. That has really been the main events, whereas the currency effects in the actual quarter were relatively material.
So let's move on to the next slide, where we will touch a bit upon the other items on the P&L. So as mentioned before, revenue driven up by NKT. That also led to an improvement in our operational EBITDA, where the growth in NKT meant that our operational EBITDA for the group ended at EUR 15.2 million, which was basically EUR 2 million above the same quarter last year. When we move further down in the P&L, we can see that we've had an increase in one of the items compared to last year. The majority of that increase is cost-related to the power cable case that you are probably familiar with. So back in 2014, NKT was fined by the European Commission to be part of alleged price-fixing activities in the high-voltage market. NKT back then disagreed with the conclusion and still disagrees with the conclusion.
So we've appealed that decision a number of times. And actually, earlier this year, we were also partly received a ruling in favor of us, which meant that our fine from back then was lowered slightly compared to what it initially was back in 2014. Nevertheless, there are still customer claims related to this case, which means that we've taken provisions of around EUR 8 million related to this. So based on our current assessment of this case, we believe that we have provisioned what is needed to cover the cost for this case. And then if we move all the way down to the net result, that is slightly up compared to last year, still in negative territory, where we, among others, have seen a beneficial development in our financial items due to some FX gains during the quarter.
If we then move to slide 20, we are showing our usual slide on the development in our operational EBITDA for the group, and as you can see, we are starting to trend upwards again after the development in 2019, so Q2 shows that we are on the right track and are gradually starting to improve our EBITDA margin again. Then I'll move to slide 21, where we are looking at the highlights on the balance sheet, and the first area I'd like to focus on is on the working capital side, where if we compare to the end of last quarter, so end of Q1, we've seen an increase in our working capital. That increase has primarily been related to the development in the power cables business. I'll come back to that on the next slide and what has caused that development.
In Photonics, we are slightly up, basically only related to a receivable on corporate tax. But apart from that, other working capital items were broadly on par with what we saw at the end of Q1. On the back of the improvement in earnings, we're also seeing our RoCE moving up slightly from what we've seen over the past couple of quarters, and obviously intent to continue that traction in the years ahead of us. Finally, on the last line of the table, you'll see that our total equity has increased, which has obviously been due to the issuance of new shares that we did in Q2, where we placed almost 5 million new shares in the market in the direct placement at that point in time, giving us net proceeds of just around EUR 90 million.
Then let's jump to slide 22, where we will provide a bit more color in the working capital development in the power cables business. So as mentioned, up from Q1 and also up from Q4 last year, where the level, as we also mentioned back then, was exceptionally low. As in previous quarter, we are obviously very dependent on the milestone payments in our largest division, so in the solutions business. And here we've seen a relatively low inflow of funds from milestone payments related to projects that we've taken in. So the phasing between Q2 and what we will see in Q3 has been unfavorable in that sense. So therefore, we expect to see some sort of reversal going into Q3 in the working capital in solutions.
In applications, we've improved our working capital level slightly compared to end of Q1, which has primarily been driven by a favorable development in our trade payables. In the service and accessories business, not much to mention in that regard, largely on par with Q1. So overall, we expect the working capital position to improve during 2020. Let's move to slide 23, which is an overview of the cash flow statement. Some of it is impacted by some of the topics that I've just mentioned before. So the development in working capital outweighed the positive EBITDA for the quarter. So we've seen a negative cash flow from operating activities of around EUR 12 million. On the investment side, we've seen a similar CapEx level across the group of around EUR 21 million, which was similar to the level that we saw in Q2 2019.
In 2019, we also had a small cash outflow related to the acquisition of Onefive in our Photonics business. In regards to the CapEx line, I would also like to mention here that we, a couple of months back, announced our intention to increase our capacity in the solutions business.
We are basically running an investment program of EUR 150 million over the next years, so from this year up until 2022, where we are preparing ourselves to deliver on the large backlog that we've secured ourselves in the recent months, and also making ready for the orders that we are expecting to come in the upcoming years, which we still expect to be around when we look at tender activity, as Alexander mentioned earlier on, and also in relation to the activities that we see on a public level to support investments in the green energy transition, not just in Europe, but basically also outside of Europe. Then let's move to slide 24, where we'll have an overview of our debt situation and our leverage ratio. In the quarter, we are lowering our net interest-bearing debt by a bit more than EUR 50 million.
The main driver for this development has been the issuance of new shares that I just mentioned previously that brought us these roughly EUR 9 million in proceeds during the quarter. We've also mentioned in May, when we launched the first equity issue, that we intend to issue further shares. They will be with preemptive rights for the current shareholders, and they are still expected to be issued before the end of 2020. Today, we will not add any more color on this, and then we promise that we will obviously come back to the market when we have more information to share in regards to that part.
The net interest-bearing debt mainly consists of our mortgage debt and then the draw that we have had on the revolving credit facility, where the draw net of the cash that we have in the bank was EUR 121 million going out of Q2 out of the revolving credit facility that has a total availability of EUR 300 million. All in all, this leaves us with the financial headroom needed to manage the level of activity that we expect in 2020. And on the last slide here, on slide 25, I will briefly touch on the financial outlook for the two businesses. So we are basically confirming the communication that we also had back in May. So for the power cables business, we still expect revenue to be between EUR 1 billion and EUR 1.1 billion in standard metal prices, and the operational EBITDA is expected to be between EUR 40 million and EUR 60 million.
In the Photonics business, we keep our guidance withdrawn. We do not believe it is possible to achieve the guidance that we provided in the beginning of the year, given the development that we've seen in the first half of the year. And we decided to keep it withdrawn at this stage, given the significant uncertainties that we see, especially related to our largest segment, the industrial segment, and also given the fact that we have the largest quarters of the year ahead of us, particularly in Q4. So I think that was the overall messages from our side, and we will now hand it over to Q&A. So operator, please go ahead.
Thank you. If you wish to ask a question, please press star and one on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press the hash key. Once again, to ask a question, please press star and one and wait for your name to be announced. Your first question comes from Artem Tokarenko from Credit Suisse. Please ask your question.
Good morning. Thank you very much for taking my questions. My first one is around the equity raise plan for the second half. I appreciate, Michael, you mentioned no more color, but I just wanted to check. In terms of the size, considering that you want so many projects in H2 and all associated prepayments with them, is there a scope for you now to decrease the overall size of that second tranche?
Yeah. I mean, I can say a little bit something to that. I mean, we are just in the process and looking into that, and really too early to conclude. We are in the process and looking at what we want to do, and it's not yet defined. So we're working on it, and we really will come up in form as soon as we are ready. So nothing more to say at this point in time, really.
Okay. Thank you. My second question is around the solutions backlog and Slide 11, where you show that you have EUR 464 million of revenue secured for 2021 in solutions. I guess this compares to around EUR 700 million of revenue at full utilization of your plan. So thinking about the next year, could you maybe give us some color about whether you're able to push forward any of the projects in the backlog to get closer to the EUR 700 million revenue? And if not, what's the other any projects in the market which can contribute materially to next year's revenue?
I mean, with the project awarded, also with the last two months' ordering in Karlskrona, we have a better visibility, and they will contribute partly in 2021. But we have, as you may have seen, recognized all the projects that have been awarded, where DC projects, and ideally, you look for the optimal mix in the factory as you have different production lines. So meaning a 3C, AC cable, DC, or MI, and this is the best optimal mix. You need to have order backlog to execute in all these lines. So we have still capacity for 2021 and beyond. But as I said, we have now a better visibility where we are.
I guess maybe just to elaborate on this, if my math is correct, I think with the new projects, your revenue is still somewhere in the ballpark of EUR 500 million for next year. So just reiterating my question, is there any scope for you to push forward the projects in the backlog, or that's not an option for you?
No. I mean, if you look at the project, what you have, you try to execute them as planned. Also, you have that aligned with the payment as agreed with the customer. You have a certain flexibility to what you call backlog, but with limitations. Because if you backlog, you need also storage in the factory, which you need maybe for others. You have a little bit of possibilities to push forward some backlog, but with limitations.
Okay. Thank you very much, and my last question is about Photonics. Obviously, the evaluation of PE is back to pre-COVID levels, so is this enough for you to come back to assessing the potential disposal process, or considering the trends in underlying markets, you'd rather keep it for next year or maybe later?
The strategic review of Photonics is ongoing, and there is no conclusion at this stage. As you might imagine, we are working pretty hard on tactical issues on day-to-day operations. The outlook is looking better for us as we go forward. In fact, we have the highest backlog we've ever had. However, the future is very uncertain in the markets that we're in. Some are good. Some are completely down. So there's no point in concluding the strategic review at this time.
Okay. Thank you very much.
Question comes from the line of Claus Almer, from Nordea. Please ask your question.
Thank you. Yeah. Also, a few questions from my side. The first question goes to the pipeline within the cable division. How do you see progress both in large orders or projects and mid-size orders, and also pricing? That would be the first question.
I mean, what we have seen in the recent awards, that was mainly large orders, and there is, of course, there's a trend towards larger, bigger orders with this interconnect connector. These are huge projects, and I think there's still a project in the pipeline to come, and where we are working on the different segments. So still, the outlook is positive. But Claus, what do you want to know here?
As much as possible, obviously, but.
I know. Very picky. You want to know. Yeah. I know. Yes.
First of all, how do you see the pipeline for orders to be signed this year, and how much for 2021? Could we see a EUR 5 billion order market in 2020 like this year?
That is, I have not the list here now in front of me, but I mean, there's still projects awarded in the second half. Now, the timing, there's also some uncertainty. So it could be also that the award, maybe decision is taken this year, but the award happens next year. So there's still some projects in the market to be awarded.
Okay. Then.
As in the market list.
Yeah. And about pricing, we have at least seen in the past when utilization goes up and the backlogs go up among all participants in the industry, then that is healthy for the pricing environment. How do you see that playing out in these days?
I think positive is, as I mentioned, EUR 5 billion in the first half. This is good for the cable industry, for us, but also for competitors, peers, and that will drive utilization industries and will consequently, if the economy, let's say, follows normal rules, will result in higher prices.
Okay, then my second question goes to the Applications division, and first of all, congratulations with the performance in the quarter. That has been years of, I guess, disappointing results out of that division. Do you think it's now a new and more sustainable level, or is there some specific Q2 things that boosted the performance?
No, it's not so specific. I mean, we had a good Q1 with EUR 3.5 million, now EUR 5.5. We see results from our actions, and I have an experienced senior cable manager who worked long in the industry, and we expect that we continue with this journey.
Okay. Then just to finally, welcome to you, Line. We are looking forward to your presentation in Q3. That's all for me.
Thank you.
Question comes from the line of Kristian Tornøe Johansen from Danske Bank. Please ask your question.
Yes. Thank you. First question is on the project pipeline as well. So obviously, you've had a very strong order intake on NKT's DC projects, but you also mentioned in the report that the awards on AC projects have been below expectations. So maybe just to elaborate, is there any specific project delays in the AC segment that you have seen, and also how does the near-term pipeline within AC look?
I mean, as a consequence of the wind turbines getting larger and being more remote from shore, DC is the natural economical technical solution. This we have seen in the last HVDC project we've been successful, almost everything DC, and there's a shift towards DC. There are still AC projects in the market, but very few. Also partly from technology, if you look in the past, there was on wind turbines, you have an AC platform before you went to DC with an export cable. Nowadays, you go from a wind turbine with 66 kV directly straight to the DC platform. So there's also an AC volume which disappears in a sense and moves to the array cable like in BorWin5. Five, six years back, you would have 138 kV AC voltage cable.
And the positive side is a move to DC to the higher end, which benefits the manufacturer which are in this field. But of course, it's also nice to have these AC in order to have an optimal mix. So that's valid not only for us, I guess, also for others in the market. And there are some opportunities in the market, but let's without being too specific here.
Okay. So just to clarify, it's not, I mean, the lower-than-expected AC awards, it's not about specific projects being delayed, but rather a technology shift from AC to DC. That's what you're saying.
It's a more technology shift in the offshore wind, definitely, and there will be maybe still AC if you are closer to shore or for, let's say, connection from land to islands. If they are close to shore, there's just a technical limit where you can go with AC due to the reactive power which is needed or generated.
Great. Then my second question is on applications and on medium voltage specifically where it seems that you're really having a good momentum. Can you elaborate on the facility you have in Denmark here and whether we should just expect that to continue as strongly as we've seen in the first half?
I mean, we have, as we said, received some orders on the medium voltage frame agreement. This frame agreement can be pulled off based on the customer requirements, and we see some higher demands here. As I said on the presentation, particularly in the Dutch region, Germany, Netherlands, or Eastern Europe, the visibility in, let's say, outside the frame agreement and the call-off is limited as this is not a long-cycle business like in solutions. It really depends a little bit how the market develops and how the investments are taken.
Okay. Understood. Great. That was all for me. Thank you.
Once again, to ask a question, please press star and one on your telephone keypad. Your next question comes from the line of Akash Gupta from JP Morgan.
Yeah. Hi. Good morning, everybody. I have a couple of questions as well. My first one is on capital increase. I know you will not be sharing the nitty-gritty of that, but just wanted to know some high-level thoughts. So basically, I mean, if I look at NKT against the two large European peers, you have a high share of solution business, which means the share of project business or turnkey projects is much higher at NKT compared to their peers, which we can also see in working capital that occasionally you have negative working capital, which means that you don't need to have high leverage on your balance sheet. And just for coming back onto the point of capital increase, I mean, obviously, there are several moving parts in terms of getting down payments on these projects, a potential sale of Photonics given peers have re-rated.
Just wanted to know, can you share any comments on the kind of balance sheet you are targeting out of this capital increase process? Because I would assume that this would be the last opportunity for you to ask shareholders for more funds.
Michael speaking here. I think we've kind of provided a target leverage structure for the company of 1.5 times debt to EBITDA. That obviously still applies. We haven't put an exact timing on when we expect to get there. So that hasn't been communicated specifically. Apart from that, it's what we are targeting. But I think you're right to what we also mentioned in the first equity increase back in May, that we are seeing we have a large share of solutions business currently, and that will grow further with the investments that we are doing. So we will be more dependent on larger projects with larger moves in working capital and milestone things, so to speak.
So that is also one of the reasons why we want to strengthen ourselves for that, apart from the fact that we are going to do investments to basically grow as we intend in the years to come. So I think that is probably as much color as we can give at this stage.
Thank you. And my second one is on margins. So if I look at your backlog, can you provide some comments on how does the backlog margins look against pre-2018 levels when we had a long period of very low order activity, which kind of impacted pricing? And obviously, since then, we had some change in mix with offshore wind getting a higher share of backlog compared to before, where you had more oil and gas projects and interconnector in backlog. So how does that mix impact margin? And then maybe continuing on the same topic, previously, you said that you need to have utilization of all the units, including vessel. So if you can indicate when we can get there in terms of full utilization of all the assets, could it be in 2021, or it would be more like 2022?
I mean, regarding the margins, what I can say is that the margins in the project what we have received are satisfactory, and in general, you can say margins in DC projects are better than in AC, in general speaking, wind terms. Then, of course, these large projects, they have opportunities and risks, and those you need to manage, and if you manage in a good way, then you may improve. So that's. And then regarding the vessel, I mean, with this recent award, Shetland and BorWin5 will add some vessel capacity going forward, which is positive, and I hope that answers your question.
Thank you. And then my final one is on production expansion. So you announced this EUR 150 million investment in Cologne factory. Will it be purely for land-based DC projects, or can you use also this new facility for submarine? And just wanted to know what are the limitations as this factory would be right next to Rhine River, and can you bring your vessel to, let's say, use this factory for submarine projects?
Well, I mean, they said approximately EUR 150 million. We will invest in two factories, Cologne and Karlskrona, and some of the machinery you can use for land as well as for sea cable at both locations. So we have a certain flexibility. Of course, in Cologne, we have the Rhine River, and we cannot control the weather, thank God, that we cannot do that. But of course, we can, with barges, with the lower draft, can improve the load out also if the Rhine River has low levels.
Thank you.
A reminder to ask a question. Please press star and one on your telephone keypad. Your next question comes from the line of Casper Blom from ABG.
Yeah. Thanks a lot. Actually, mostly follow-ups. On the application where I also plot the rebound and profitability here, could you confirm that you still sort of have a medium-term target of getting to an EBITDA margin of 7%-9%? Secondly, a bit of housekeeping. After you surprised me a little with the provisional one-off here in the quarter, could you give any kind of guidance on the one-off levels that we should expect in the second half of the year? That's all for me, actually.
So maybe I can answer the first question. I mean, we have communicated the 7%-9% in 2017. And as I mentioned earlier in the previous calls, we work now on improving the application business, and we're improving gradually. So it will not go, it will not be a fast one, but we are in a good way. And obviously, we are ambitious. We should be also ambitious and work towards to be, let's say, equal than our peers. That should be our ambition. But that will be not this year that we achieve these levels. And I can also not tell you exactly when we will reach it, but we work towards to be equal than our peers.
Thanks for that answer. But just coming back to the question, could you confirm that you still have that target?
No. No. Look at our peers where they are and we target those.
Okay.
Kjell, but in regards to one-offs for the remaining part of the year, I think that can be relatively short because as of now, we expect only limited one-offs in the second half of the year.
So low single digits, or?
Yeah. Yeah.
Okay. Thank you, Michael.
Your next question comes from the line of Artem Tokarenko from Credit Suisse.
Thank you very much for taking my follow-ups. Just on applications business, could you give us some color on, in Q2, how much of the EBITDA improvement came from internal efficiency measures as opposed to just better mix in revenues?
I'm not sure whether I'm absolutely right. So we had some improvements on the profitability due to the mix. With a higher portion of medium-voltage where we see the higher demand with better price levels, which is positive. And then we have also worked on factory efficiency where we continue to work. So both elements without being more specific here.
Okay. Maybe I can ask differently. My sense from better orders and medium voltage is that this partly comes from you winning market share during the COVID because of some of your peers who are not able to access the markets where you have high market shares. Do you see those market share gains as sustainable into the future, or the results of the first two quarters should largely be seen as a one-off because of this situation?
I think, I mean, I mentioned that U.K. and France were closed. So definitely, we have not gained their market share if we could not deliver. We believe that we gained market share, but low voltage, medium voltage, a lot of customers, a lot of deliverables. It's not so easy to calculate market share compared to the solutions, but we believe we gained market share, and this we need to defend going forward.
And I think it's also fair to mention that these are customers that we have worked with for a number of years to improve our share with. So it's not like they've just called us because they couldn't find anybody else. It's also a question about our sales team that has actually done a really great job in securing these orders across the markets, also before COVID came.
Thank you very much. And my last question is for Line. Congratulations for joining the company. And I guess any of your thoughts or any color on what will be the major focus topics for you in the coming six months?
Thank you for the question. And being fairly new, I must also probably give myself some time before I jump to conclusions. But of course, the execution of the big corridor project is a key priority and investment-related here too. So that is what I'm really looking to get further into and understand better also from a financial angle.
Thank you very much. Thank you, guys.
Your next question comes from the line of Akash Gupta from JP Morgan.
Yeah. Hi. Just a follow-up on working capital, and it's a quick one. So you said there was some impact or basically lower milestone-based payments in Q2, and you expected that to improve in Q3 and thereafter. Just checking that we are already halfway through Q3. So have you received some of these milestone-based payments, or do you expect to receive in remaining part of Q3?
We will not comment on Q3, on the month of Q3, but we are comfortable that we will improve our working capital in Q3.
Thank you, Michael.
We have no further questions. Please continue.
Okay. If there's no further question, then thank you very much for your good questions and your participation. And we wish you all here together a good day and talk to you soon.