Shareholders, welcome to the AGM in NKT. I will now go through the developments of 2018, both as regards to our business and the work of the board of directors. I will also look to the future. 2018 was a challenging year, where the results were not satisfactory. Unfortunately, this could not be balanced out by the fact that NKT Photonics delivered a very satisfactory account and were prosperous. The cable business were influenced by a number of internal, external factors, which have also slowed down the speed of the transformation and which will influence our results in 2019. Therefore, we ended our cooperation with the CEO, Michael Hedegaard Lyng. As we could announce last Tuesday, we now have found our new CEO. I am very happy to welcome Alexander Kara.
He has more than 30 years' experience from a managerial post in ABB, which gives him the necessary combination of experience and knowledge of the field, which is necessary for operating and for driving forward the development of NKT. Until he begins on the 1st of August this year, Roland M. Andersen will continue as temporary CEO. He has carried out this work very well, I must say. Now I will look to the share price, which reflect very much the challenges that we had in 2018. In 2017 and at the beginning of 2018, we were influenced by the lack of orders in the high voltage field.
There was a potential enough in orders, but we were not able to do what we used to do. That meant that we had a low exploitation of capacity in our factory in Karlskrona, and also unsatisfactory earnings within low and medium voltage cables. That made us lower our financial expectations of 2018, but also to communicate or announce that 2019 will not be a good year. This, of course, has influenced the share price negatively. I can see that we have not really been able to communicate properly how the lack of high voltage orders will affect our earnings in the coming period. Therefore, we will focus on communicating even clearer how this development will influence the financial results for a longer period of time.
As you can see, we have actually done more badly than the market in Denmark generally, and also worse than our competitors. If you look at the past 12 months, we, Prysmian and Nexans, have fallen to more or less the same low level. So we have seen quite a lot of extension of projects and so on in this high voltage market. When we look at the results for NKT A/S, the earnings in 2018 increased to EUR 1.1 billion, which was DKK 39 billion more than 2017. Operational EBITDA fell to EUR 79.3 million from EUR 141.8 million in 2017. The development in the EBITDA was a result of the contribution of the cable business being less than in 2017. Our operational cash flow fell from EUR 87.8 million in 2017 to EUR -42.2 million in 2018. There were three reasons for this.
The operational EBITDA was lower, as I mentioned before, and the development in our employment capital, which increased from a very low level at the end of 2017, and which is very much influenced by the timing of the individual projects. In 2017, Nilfisk was included in the first nine months, which had a positive influence on the cash flows. Because of this demerger, Nilfisk has not been included in 2018. Our return on invested capital fell from 11.8% in 2017 to -0.7% in 2018 because of the lower earnings in the cable business and the increased employment capital or work capital. At the end of 2018, NKT had a net interest bearing debt of EUR 248.3 million, which is a decline of EUR 45 million from the end of 2017.
It is our objective in the medium term to operate with a net interest bearing debt of 1.5x operational EBITDA. At the end of 2018, this was 3.1x operational EBITDA. The board therefore recommend that no dividend will be paid out for the year 2018. It is still our policy to pay out a third of the year's results in dividend when our capital structure allows this. In September 2018, we refinanced our credit facilities, a total of EUR 450 million. By issuing a hybrid bond and a credit facility, which was made available by a Nordic group of banks. This refinancing replaced all existing bank facilities, and we assess that we have the financial space now to counter the consequences of the lower order book and the level of activity in 2019. I will now look at our cable business, which operate in three areas.
The first one is solutions, which cover high voltage cable for both on and offshore products. The second one is applications, which service the market for low and medium voltage cables, which includes installation cables for building business. Then we have service and accessories, which carry out service on cable solutions, and which sell accessories to cable project within primarily medium and high voltages. In the cable business, the turnover in for standard metal prices, we saw a low increase to EUR 1.08 billion, while operational EBITDA fell to EUR 70 million compared to EUR 138 million in 2017. The development was primarily driven by solutions and on unsatisfactory earnings in applications. As regard solutions, the result for 2018 was influenced by a satisfactory execution of projects, but there were fewer projects and an average lower earnings.
In addition, two projects were delayed in the fourth quarter because of external factors, which meant first, extraordinary low level of water in the River Rhine meant that it was not possible to sail cables from our factory in Cologne, and also one of our sub-suppliers damaged one of our cables during a job. Therefore, there were delays. Our ship, NKT Victoria, you can see her here. She had a year with a satisfactory activity, and she placed cables in the Norwegian oil platform, Johan Sverdrup and to several wind turbines, such as Kriegers Flak, which would be the largest park of wind turbines in Denmark when it is fully operational in 2021. When that is being said, we ended 2018 by gaining five large orders. One of the orders was the German project Ostwind 2, where our cables will connect a number of wind turbines to shore.
The value of that contract is EUR 300 million, and therefore it is the largest order in our history. At the same time, it's the first time that we win a project, which will be produced in both Cologne and Karlskrona. This emphasizes the possibilities we have with two high voltage factories, which are strategically well-placed to deliver cables to the important market in Northern Europe. By both factories being involved, we can offer our customers more flexibility, and that makes us also able to handle even larger projects than we are able to handle today. Altogether, the five orders meant that's an additional EUR 800 million in our order book, which at the end of 2018 amounted to EUR 1.1 billion.
This positive twist emphasizes our trust in the great potential in green transition, where we will persistent with our know-how and our technologies to gain shares or our projects of shares in the years to come. To understand our business, it's important to know how it influence our financial results when the number of high voltage orders decline, as we saw in 2017 and the first half of 2018. When there are periods with low market activity with less orders, then there will be increased competition on the projects that are already in the market. That means a lower earning generally because of fewer projects, but also a lower earning per project.
When we also win fewer orders, then we are not able to exploit the capacity in our factories to the full extent, and this will also mean a lower earning, because we need to cover our fixed costs. At the same time, it's important to understand that big cable project typically extends several years from we receive the order till we deliver the finished project to the customer. That is also what will influence in 2019, where our earnings will be influenced negatively despite a satisfactory order intake in the second half of 2018. Now, there are many phases of the individual projects from we receive the order till we finally deliver it to the customer, and you can see this up here.
To maximize or to use our factories to the full extent, we would like to have several orders divided or spread out over all the phases. That means that ideally, we like projects which are starting up, projects which has been going on for some time, and projects which we are terminating. This last time we experienced that was in 2017, where we had projects in various phases at the same time with being able to exploit NKT Victoria for the installation of produced cables. When things go slow, it takes some time before we actually see the effect, and it will take some time before things speed up again, and we can see the effects. Now I would like to look at applications. The earnings of applications which cover our low and medium voltage business was not satisfactory in 2018.
The primary reasons have been that internally, we have probably been too ambitious and we have launched too many projects in order to optimize and make this part of the business more efficient. This means that we have not executed the projects as we expected to do. On top of that, we were also challenged by the weather in the Swedish market, which, in several periods, prevented the installation of cables, medium voltage cables. The winters were too cold, and in the summer, we were not able to carry out work because of the risk of forest fires. In applications, we execute a number of prioritized initiatives, which we expect will improve earnings during 2019. Finally, service and accessories, which is the third leg of our business. We will see a result which is in line with our expectations.
For example, we had the potentials within, especially the service business, confirmed. In 2018, we carried out several service tasks on both on and offshore cable solution, and we have also expanded our service model. So we are able to help our customer quickly, when there are problems with or errors in their cable connections. Accessories, which cover our business for cable accessories, where we saw a positive development in the Middle East, and we entered into several contracts. In Europe, we were influenced by a challenge in the German market, while the result in our core markets or key markets in the Nordic country was as expected. Despite the challenges of 2018 and also the difficult 2019, we still have faith in the strategic direction which we set in 2015. We are still executing a number of initiatives developed specifically for the individual areas and their segments.
During the year, they have seen progress in many of them. They are grouped here in development and growth, profitability, and turnaround.
We have sold a number of less core areas away to focus our cable business, such as our investment in railway, which was finally divested in February this year. Innovation and digitization is still a strategic focus area for NKT, and in 2018, we have initiated a number of digital initiatives. One of them is that our digital hub has launched their first product in the shape of a digital platform for handling cable drums, where customers via an app can get information as to where the drum is and how much cable is left on it. You would not believe it is necessary, but it is like containers. They just sort of end up anywhere. Therefore, we have employed Anders Jensen as new head of technology in September. It is an important step to strengthen our product development and innovation.
Anders is present, and I am sure he will be happy to answer your questions afterwards outside in the lobby. If we look at 2019, it is going to be a challenging year for the cable business, where, as we have mentioned in the past, expect to see lower capacity exploitation of our factory in Karlskrona. Therefore, we have full focus on three overall priorities in 2019. We must continue to increase our order book of high-voltage projects, which must increase the earnings in applications by focus on fewer and important initiatives, and we must reduce our costs without compromising future growth possibilities as we see in the market. Therefore, we launched a cost-cutting program in February, which will be focusing on our general expenses and to an adaptation of the organization.
We expect to reduce the number of white-collar positions by 8% in 2019, which is about 130 posts in all of Europe and about 70 will be in Sweden. The expected savings will be about EUR 15 million, and we expect to see this realized in half of it in 2019. Having said that, we have seen increased activity in the market in the second half of 2018, which we expect to continue in 2019 and in future years. There is growing demand for green and renewable energy backed up by broad political forces and also a growing demand in the general population. This development is run mainly by wind power parks, both offshore and onshore, and there will be an ongoing phasing out of nuclear and coal-powered power stations.
This development will mean that we have more flexibility in transmissions as renewable energy sources are dependent on, for example, that the wind actually blows. We see in this conversion that projects and constructions of wind energy fields is prevalent in many European countries and many countries outside Europe and United States and Taiwan. At the same time, we see many projects where the energy grid is connected across land borders, which we expect will be relevant for cable producers in the coming years. In the market, we see cable projects with a deciding both for a broad product portfolio within AC and DC. With the purchase of ABB's high-voltage business two years ago, we strengthened our product portfolio, and it gave us access to
the DC technology, which we expect will be central to the cable market in the coming years. We also took a very strategically important step by equipping NKT for future growth, and we will maintain and strengthen our position within high voltage. Now, I will look at NKT Photonics, which produces and markets products within imaging and metrology, which allows us to take images of very small structures, such as, for example, skin cells. Sensing and energy, which are lasers used for monitoring and measuring equipment, and then material processing, which are lasers that can cut hard materials such as, for example, glass and metal very accurately. In these fields, NKT Photonics is a leading producer in the market based on several years of development, and we expect these segments to continue in a positive fashion in the coming years.
NKT Photonics has a particular expertise in developing lasers that are precise and efficient, and with a growing population, there is a need for efficient and optimal use of the resources available. We see this in the pharmaceutical industry, where lasers from NKT Photonics ensure that screening and diagnostics of illnesses has become more efficient. The ongoing development with smaller and smaller technological solutions in a range of products is also important growth drivers for NKT Photonics. Our ultrafast lasers can, for example, cut very precisely and even very small structures used in industrial products. in 2018, NKT Photonics delivered great results in accordance with our expectations. The turnover or revenue rose by EUR 17 million to EUR 67.7 million on 2017 . The development has been driven and a stable execution across the business areas, where the order books rose by 38% on 2017.
NKT Photonics achieved a record EBITDA for EUR 9 million, primarily driven by higher revenues. The organic growth was 16%, and 2018 was the first year where NKT Photonics delivered double digit organic growth for the first time since 2013. These great results for 2018 can be ascribed to all three business areas. We saw good growth in sales for monitoring, for example, to the detection of fires and monitoring of cables. At the beginning of the year, we received the prestigious Prism Award for the new product LIOS EN.SURE, that can measure and monitor temperatures in cables over a distance of 70 km. Still smallest but fast-growing segment, material processing will also be good primary, has also seen good growth, primarily within ultrafast lasers for hospital equipment. In the second quarter, the integration of Onefive, the acquisition for 2017, was concluded, which has strengthened our position.
We have, throughout the year, strengthened our organization so that we are ready to make the best of the growth possibilities. For example, we are setting up a business or an office in the United States to expand our business there. In 2018, we executed well on the strategy, which is about commercializing the business. The initiatives cover, for example, moving upwards in the value chain and focusing on lower or delivering solutions rather than products for special industrial customers. To focus on organic growth after two successful acquisitions in 2016 and 2017. To ensure an efficient and lean production centered in a core function, and to continue the fast introduction of new products as our technological foundation grows stronger. In 2018, we have launched a number of new products, which has helped fund our position in the market.
In 2019, the focus in NKT Photonics is intended to use the present momentum for growth and continue the commercialization of that segment. Now, I will briefly look at the board and give a brief update on our activities. Back in 2013, you may remember that we introduced a new management model. As you have seen, we still have many meetings both in the board and in the companies where we work closely together with the management boards. It means that the cable business and the photonics business are two separate business units that refer direct to the board of directors. We think this rather atypical management model has proven an advantage to NKT. We also assess that the board has the right composition with the necessary qualifications to drive NKT towards further value growth.
In the board, we have evaluated our position and concluded we are a good team, where there is room for good divisions. We have room for disagreement. There is a great deal of confidence between the members. Our governance model also works well, as well as the committees that have been appointed. We think we have the good composition on skills, but not on composition, as we wanted to increase the figure of the less represented gender from 17% to 37%, so that it is the good reflection of the composition in our company. Members of the board are well prepared, and there is good meeting discipline. Where we assess there have been challenges was the question of the dismissal of our CEO and our reaction. Not so much solutions, which has found further orders and increased our market share, and we have also executed well.
In relation to applications, the turndown is self-inflicted. Our cable business in solutions is characterized by having a long breaking distance, and as further mentioned, we are also ready to make sure that the investor communications on the projects is sufficient. I am happy that all members of the board elected by the AGM have expressed they wish to stand for reelection, and they still want to be part of our journey. As I mentioned, I have now been in NKT's board since 2006, which means that I am no longer independent in the terms of good governance rules. The board still thinks that it is the interest of NKT that I stay, and an overall board will also be elected by the annual general meeting. It is item seven on the agenda.
The remuneration will be unchanged, which means that we receive remuneration for our positions and committee positions level with comparable companies. I would say that the chairman's participation in committee does not call for a special fee. This is discussed on item six on the agenda. The board does not participate in the incentive schemes program. I would like to thank all staff for their efforts in 2016, which has helped us ensure that customers select us as their working partners. We have seen both the board and the management board showing responsibility and making sure that we look at promising business opportunities, and we are good at sparring as well. The tradition prescribes that I talk about our financial prospects for this present year.
In cable, in 2019, we expect revenue in standard metal prices of EUR 0.9 billion-EUR 1.0 billion and an operational EBITDA of EUR 10 million-EUR 30 million. Both these key figures are lower than what we realized in 2018. This is because we expect to use the capacity of factory in Karlskrona less. We maintain our targets in the medium term, where we expect an operational EBITDA of [EUR 200 million-EUR 225 million] and a return on invested capital of 13% or more. For NKT Photonics, we expect a growth momentum to continue in 2019 with an organic growth of 15%-20% and an EBITDA margin of 15%-20%. In the medium term, we are talking about an annual organic growth of more than 10%, EBITDA margin of 25%, and a return on invested capital of about 20%. As I said, this is unchanged compared with previous announcements.
Initially, I said that 2018 was a challenging year for NKT and that 2019 will also be difficult. Therefore, it is important to focus on the execution, in accordance with the general lines, and be strong in our cable business for our future growth. We will onboard our new CEO, Alexander Kara, from the 1st of August, and through his strong competencies, we will also be in a better position. In NKT Photonics, focus will be on the continued commercialization and the maintenance of the present momentum.