PRESS RELASE
A STRONG START TO THE YEAR,
PAVING THE WAY TO NEXANS’ FULL POTENTIAL
- Strong and selective value growth across all businesses, setting a robust basis for the year
- 2022 guidance confirmed
- Successfully managing a challenging environment - Auto-harness
Ukraine units maintained at 85% capacity in Q1, now back to 100% - Implementing the 2022-2024 “Winds of change”– reorganized businesses around six segments
- Completion of the Centelsa acquisition in
Colombia early April
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- Standard sales stood at
1,623 million euros , up +6.1% organically compared to first-quarter 2021 and +16.3% organically excluding Metallurgy, reflecting robust demand across markets and an acceleration in electrification trends globally - Demand drove healthy backlog growth (+19% year-on-year) with Generation & Transmission adjusted backlog1 at
2.4 billion euros up +52% compared toMarch 2021 - Excellent customer traction for our services and solutions and customer-focused innovations continued apace as part of our SHIFT Prime and Amplify programs
- Safety of our people and continuity of Auto-harnesses operations ensured in the
Western Ukraine with units output and delivery capacities maintained at 85% during the quarter and organic standard sales growth of +16% in Auto-harnesses activity - Cost pass through mechanism, successful monitoring of supply chain challenges and disciplined pricing measures supported margins
- S&P rating upgraded to BB+ confirming the Group’s successful transformation
- 2022 guidance2 confirmed, supported by selective sales growth and transformation program
Group-wide, we started the year with exceptionally strong momentum, directly resulting from the implementation of our new strategy combining smart growth (value driven) with our strategic customers and the deployment of our very successful transformation programs, SHIFT and Amplify. We are therefore confident about achieving our 2022 financial guidance.
This month we welcomed on-board the world-class cable manufacturer Centelsa in
CONSOLIDATED SALES BY SEGMENT
(in millions of euros) At standard metal prices Copper reference at €5,000/t | Q1 20213 | Q1 2022 | Organic growth Q1 2022 vs. Q1 2021 | Sequential growth Q1 2022 vs. Q4 2021 | |
Generation & Transmission (High Voltage & Projects) | 147 | 222 | +47.1% | -20.2% | |
Distribution (Territories) | 205 | 241 | +14.9% | +10.7% | |
Usages (Building) | 389 | 439 | +14.8% | +13.0% | |
Industry & Solutions | 344 | 367 | +5.5% | +1.9% | |
Telecom & Data | 74 | 86 | +14.3% | +8.0% | |
Other Activities | 343 | 267 | -26.3% | +11.2% | |
Group total | 1,503 | 1,623 | +6.1% | +3.7% |
I. Q1 2022 Highlights and General Operating Context
Strongstart to the year: +6.1% organic growth Q1 2022 vs. Q1 2021
- In the first quarter of 2022, sales at standard metal prices were at
1,623 million euros , up +6.1% organically compared to the first quarter of 2021, reflecting Nexans’ structural strengths and robust demand across businesses. The Group benefitted from strong demand across electrification markets, up +21.4% year-on-year, and continued the reduction in metallurgy external sales, achieving +16.3% organic growth excluding Metallurgy business. - Nexans is closely monitoring developments in
Ukraine and the surrounding region. First priority remains the safety and security of its employees at its three Auto-harness plants located in theWestern Ukraine and to providing them with all the necessary assistance. Throughout the quarter these plants were able to operate at around 85% capacity. - Solid and healthy order momentum was maintained, with the Group backlog up +19% year-on-year and several contract awards in energy transition markets, reflecting renewable energy trends as well as Nexans’ subsea excellence.
- During the quarter, the Group successfully balanced cost inflation with pass through and pricing measures across all operations.
- S&P rating was upgraded to BB+ confirming the Group’s successful transformation and solid balance sheet.
- 2022 Guidance confirmed: EBITDA between 500 and
540 million euros ; Normalized Free Cash Flow4 between 150 and200 million euros at constant scope.
“Winds of change” 2022-2024: paving the way to full potential
Nexans’ 2022-2024 plan announced in
- The Group completed the acquisition of the world-class cable manufacturer Centelsa in
Latin America onApril 1 after obtaining antitrust clearance from Colombian authorities; - Progress has been made on SHIFT Prime program, with the enhancement of a customer centric culture, the set-up of
Design Labs , innovation processes and an Offer Management Cycle for the scale-up. As of today, the program has been rolled out in nine business units across 16 countries. In parallel, the team finalized the implementation of Nexans’ tailor made Accelerator tool to ensure continuous project management and performance monitoring of initiatives launched; - As part of its Amplify ans SHIT Prime programs, the Group launched its global ULTRACKER offering in the first quarter, with good customers traction, and ramped up the duplicated global offers launched last year;
- The Group continued to reduce its external metallurgy sales to focus on its internal needs.
II. Q1 2022 Sales per
In line with Nexans’ 2022-2024 ambition “Winds of change” to become an Electrification Pure Player covering the entire electrification value chain, our business segments have been organized six five segments:
- “Generation & Transmission” covering the former “High Voltage & Projects” segment;
- “Building & Territories” segment is divided into its two components:
- “Distribution” formerly “Territories (Utilities)” to include medium-voltage cables and accessories,
- “Usages”, formerly “Building”, to include low-voltage cables
- “Other activities” to include the metallurgy activities, notably the activity in
South America previously included in the Building & Territories segment and representing19 million euros of standard sales in the first quarter of 2022. The scope is detailed in the appendix; - “Industry & Solutions” and “Telecom & Data” segments remain unchanged.
ELECTRIFICATION BUSINESSES: +21.4% ORGANIC GROWTH IN Q1 2022
| GENERATION & TRANSMISSION (FORMERLY HIGH VOLTAGE & PROJECTS): +47.1% in Q1 2022 reflecting strong demand and execution
Generation & Transmission recorded organic sales growth of +47.1% in the first quarter of 2022 compared to the same period of 2021. The segment benefitted from the contribution of the Charleston plant, the unique subsea high voltage manufacturing plant in
The segment witnessed solid and healthy momentum in terms of order, in line with its risk-yield analysis and selectivity policy. The adjusted backlog5 stood at 2.4 billion euros at the end of
Nexans was awarded several projects in energy transition markets, reflecting renewable energy trends as well as the Group’s leadership and ground-breaking assets, notably a turnkey contract for the Dieppe-Le Tréport offshore wind farm in
| DISTRIBUTION (FORMERLY TERRITORIES): +14.9% in Q1 2022 reflecting growing grid investment
Distribution sales amounted to
The quarterly trends by geography were as follows:
Europe was up +11.1% reflecting contract renewals and robust demand. The Nordics benefitted from mild weather while sales inGreece were down before the launch of contract renewed at the end of 2021.South America was stable at -0.4% in first quarter 2022 compared to first quarter 2021.Asia Pacific was up +5.8% during the quarter.Australia and New Zealand delivered sound growth supported by a recovery in demand, whileChina suffered from locally imposed lockdowns.North America was up sharply by +111.2% thanks to a booming market and Nexans’ solid position.Middle East andAfrica was up +4.1% reflecting an upward trend inMorocco .
| USAGES (FORMERLY BUILDING): +14.8% in Q1 2022 reflecting value growth supported by robust demand and pricing agility
Usages sales amounted to
Quarterly trends by geography were as follows:
Europe grew +6.8% in first quarter 2022 compared to first quarter 2021. The growth was supported by robust demand, new product launches and amplified solutions as well as disciplined pricing across the region.South America was down -4.0% during the quarter, affected by a high base effect as the region benefited from a strong rebound and stocking last year.Asia Pacific was down -4.9% in first quarter 2022 compared to first quarter 2021 withOceania affected by lockdowns.North America was up by a strongly +70.5% reflecting booming construction market demand and Nexans’ leading position in the region.Middle East andAfrica was up +38.8% boosted by a sustained performance inWest Africa andMorocco and recovery trends inLebanon andTurkey .
NON-ELECTRIFICATION BUSINESSES: +7.1% ORGANIC GROWTH IN Q1 2022
| INDUSTRY & SOLUTIONS: +5.5% in Q1 2022 reflecting sustained growth despite headwinds
Industry & Solutions sales amounted to
Automation remained robust (up +15.6% year-on-year), boosted by demand in
Automotive harnesses was up strongly by +15.6% in the first quarter of 2022. The strong momentum was supported by market share gains, despite Ukrainian crisis impact during the quarter with the three plants located in
| TELECOM & DATA: +14.3% in Q1 2022 with an upward trend in
Telecom & Data sales amounted to
LAN cables and Systems was down by -8.1% in the first quarter 2022 compared to first quarter 2021 due to soft demand in the
Telecom Infrastructure rebounded by +12.0% supported by good momentum in
Thanks to its backlog, sales were up +44.3% in the
OTHER ACTIVITIES (MAINLY METALLURGY): -26.3% ORGANIC GROWTH IN Q1 2022
| OTHER ACTIVITIES
The Other Activities segment – corresponding for the most part to copper wire sales – reported sales of
III. 2022 Outlook
The Group is confident in its ability to maintain and further enhance its performance momentum. Nexans will continue to pursue a strategy focused on value growth over volume, to build on strong innovation as well as on its investments in the growing Generation & Transmission markets, and to develop value added systems and solutions for its end-users.
Driven by the agility of its teams, its ambition to electrify the future and its 2022-2024 transformation plan, Nexans is confident at the beginning of this year and confirms its targets for 2022, excluding acquisition and divestment:
- EBITDA between 500 and
540 million euros ; - Normalized Free Cash Flow6 between 150 and
200 million euros .
IV. Environment, Social and Governance commitments
During the first quarter, the Group initiated the roll out of its E3 management tool with pilots carried out at three sites. Nexans made significant progress towards its ambitious Corporate Social Responsibility strategy notably:
- In
France , Nexans scored 85 out of 100 points in the 2021 Professional Equality Index, stable compared to 2020. The Group is committed to gender equality and targets 18%-21% of women in top management positions by 2023. - Nexans joined, as Gold Partner, the Edison Innovation Foundation’s Thomas Edison Pitch Contest, open to students in grades 4 through 12. Created in 2010, the contest promotes project-based STEM learning and encourages invention, innovation, and entrepreneurship among students before they get to college.
V. Significant events since the end of March
On
On April 7 – Nexans announced the appointment of
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A conference call is scheduled today at
Webcast
https://channel.royalcast.com/landingpage/nexans/20220427_1/
Audio dial-in
- International switchboard: +44 (0) 33 0551 0200
France : +33 (0) 1 7037 7166United Kingdom : +44 (0) 33 0551 0200United States : +1 212 999 6659
Confirmation code: Nexans
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Financial calendar
About Nexans
For over a century, Nexans has played a crucial role in the electrification of the planet and is committed to electrify the future. With around 25,000 people in 42 countries, the Group is leading the charge to the new world of electrification: safe, sustainable, renewable, decarbonized and accessible to everyone. In 2021, Nexans generated
Nexans. Electrify the future.
Nexans is listed on Euronext Paris, compartment A.
For more information, please visit www.nexans.com
Contacts:
Financial communication Elodie Robbe-Mouillot Tel.: +33 (0)1 78 15 03 87 elodie.robbe-mouillot@nexans.com | Communication Elyette.roux@nexans.com Minaa El Baz Tel.: +33 (0)1 78 15 04 65 minaa.el_baz@nexans.com |
NB: Any discrepancies are due to rounding
This press release contains forward-looking statements which are subject to various expected or unexpected risks and uncertainties that could have a material impact on the Company’s future performance.
Readers are invited to visit the Group’s website where they can view and download the 2021 financial statements and Nexans Universal Registration Document, which includes a description of the Group’s risk factors.
1 Adjusted backlog including subsea and land contracts secured but not yet enforced in the former High Voltage & Projects segment.
2 Guidance confirmed for EBITDA and Normalized free cash flow.
3 At constant scope on sales at standard non-ferrous metal prices. Detailed impact of changes are available in appendix.
4 Free Cash Flow excluding strategic capex, disposal of tangible assets, impact of material activity closures and assuming project tax cash out based on completion rate rather than termination.
5 Adjusted backlog including contracts secured but not yet enforced
6 Free Cash Flow excluding strategic capex, disposal of tangible assets, impact of material activity closures and assuming project tax cash out based on completion rate rather than termination.
Attachment
- Nexans_First quarter 2022 Press release_Final
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