PRESS RELEASE
- Steady sales growth despite challenging supply chain environment
- 2021 guidance confirmed
- First M&A milestone of
Nexans 2022-2024 strategic ambition to Electrify the Future- +8.2% year-on-year standard1 revenue organic growth2 in the first nine months of
4,494 million euros , reflecting dynamic recovery and selective growth in line with SHIFT transformation and despite challenging supply chain environment. In the third quarter, Group standard sales up +0.4% compared to third quarter 2020 at1,382 million euros - Current sales land at
5,448 million euros in the first nine months of the year, up +27.2% alongside copper price inflation - Successful monitoring of supply chain challenges with no material margin impact due to raw material shortage and cost inflation
- Demand drives healthy backlog growth (+9% year-on-year) across all businesses; with Subsea High-Voltage adjusted backlog at
1.5 billion euros 3 - Nexans Aurora inauguration and Charleston US high voltage plant commissioned to support the energy transition.
Nexans 2022-2024 strategic ambition to Electrify the Future: groundwork initiated with the agreement to acquire Centelsa inColombia 4- Confirmed 2021 guidance5 supported by selective sales growth, fixed costs reductions and SHIFT Performance program achievements
- +8.2% year-on-year standard1 revenue organic growth2 in the first nine months of
- Inaugurated with our key stakeholders our new vessel Nexans Aurora, an important enabler to build a safer, more sustainable and inclusive global energy system. This leading-edge vessel will contribute to unlocking the huge potential of offshore renewable energy and subsea interconnection alongside our unique subsea cable manufacturing plant in
Charleston, USA . - Reached a first milestone of our new strategic ambition by announcing
September 10 th a Share Purchase Agreement withXignux SA to acquire Centelsa4, a premium cable maker inLatin America . This world class and iconic South American operation will further contribute to Nexans’ ability to serve renewable projects in theAndean Region . - Continued to launch innovations to support further value creation while also reinforcing our ESG commitments by hosting Nexans’ second Climate Day and proposing the election of
Laura Bernardelli as an independent director to the shareholders' meeting.
CONSOLIDATED SALES BY SEGMENT
(in millions of euros) At standard metal prices Copper reference at €5,000/t | 9M 2020 | 9M 2021 | Organic growth 9M 2021 vs. 9M 2020 | Organic growth Q3 2021 vs. Q3 2020 | |
Building & Territories | 1,832 | 1,872 | +3.0% | -1.5% | |
Industry & Solutions | 898 | 1,007 | +13.5% | +3.1% | |
Telecom & Data | 322 | 241 | +5.4% | +11.3% | |
High Voltage & Projects | 534 | 520 | -6.0% | +8.0% | |
Other Activities | 716 | 854 | +27.8% | -6.8% | |
Group total | 4,302 | 4,494 | +8.2% | +0.4% |
I. 9M 2021 Highlights and General Operating Context
+8.2% organic growth in 9M 2021 compared to 9M 2020
- In the first nine months of 2021, sales at standard metal prices totaled
4,494 million euros , up +8.2% organically compared to the first nine months of 2020 and up +0.4% in the third quarter 2021 compared to third quarter 2020, reflecting solid year-to-date dynamic and SHIFT transformation selective growth, and despite challenging supply chain environment and third quarter seasonality. Nexans demonstrated healthy backlog growth in all segments thanks to sound commercial momentum and extended risk-reward selectivity. Continued demand drove backlog up +9% year-on-year.- Tight monitoring of raw material cost inflation and supply shortage avoidance were ensured through: i) cost pass through mechanism and other mitigation measures embedded in our operations, for example hedging of non-ferrous materials or material prices (copper and aluminum) contracting and; ii)
Nexans unique SHIFT Performance model enabling agility and performance while reducing volumes to focus on value yield customers/products.
2019-2021 Transformation Plan: Final steps
- 2021 confirmed guidance on EBITDA, ROCE and Free Cash Flow before M&A and equity operations supported by continued performance in all activities.
- During the quarter, the Group pursued SHIFT transformation program across all operations further implementing cost and productivity improvements while also closely monitoring raw material supply and cost appreciation.
Nexans unveiled its second cable-laying vessel, the Nexans Aurora, to customers and stakeholders at a dedicated ceremony in Halden,Norway . Charleston plant in the US was commissioned and progressed on the manufacturing of HV cables for Seagreen Offshore Wind farm project inScotland .
2022-2024 strategic ambition: First M&A milestone
Over the period, the Group started laying the groundwork on its three main pillars:
- Simplify to Amplify:
Nexans announced its first M&A milestone aligned with the Group’s strategic ambition to become a Pure Electrification Player. The Group signed a Share Purchase Agreement with Xignux to acquire Centelsa, a premium cable maker based inColombia active in Building and Utilities applications. Centelsa, a world class player, had a total turnover of more than$250 million in 2020 and an enterprise value of$225 million . Closing of the transaction is subject to regulatory approvals and is expected to take place in the first half of 2022. - Transform and Innovate: the Group actively progressed on SHIFT Prime program implementation in its Building business.
Nexans stepped up its innovation program launching MOBIWAY UN’REEL in the quarter. This unique solution provides simpler and smarter installation of a large range of cables. Also, the Group pursued its innovation roadmap through the rollout of VIGISHIELD which provides customers with a connected and complete protection against cable theft. - Scale-up to Step-up Performance: initiating metallurgy exposure reduction.
II. 9M 2021 Sales per
| BUILDING & TERRITORIES: +8.4% in 9M 2021 like-for-like6 reflecting selective growth in dynamic markets
Building & Territories segment sales amounted to
In the third quarter 2021, revenues were down -1.5% reflecting closure of Chester plant in the US in
The Building segment witnessed strong demand in the third quarter across geographies and benefited from solid recovery in the construction market throughout the first nine months of the year. The Territories (Utilities) activity slowed-down during the period due to frame-agreement ongoing renewal in
The first nine months trends by geographies were as follow:
Europe activity stood at +5.5% in the first nine months of 2021 compared to 2020 and +2.0% in the third quarter reflecting sustained dynamic notably in the construction cable activities notably inFrance ,Sweden andSpain .South America was strongly up by +27.1% in the first nine months and +4.5% in the third quarter. The region benefitted from a double-digit growth inPeru andBrazil in virtue of construction activity upturn, solid backlogs and improving sanitary and political situation.Chile benefitted from projects contracts since the start of the year.Asia Pacific was down -4.7% in the first nine months of 2021 and -1.7% in third quarter 2021.New Zealand continued to show sound growth, notably with the Utilities whileAustralia suffered from a slowdown in domestic demand caused by continued Covid-19 lockdown measures, supply chain and freight constraints.North America declined by -30.4% in the first nine months due to the US Chester plant closure in 2020 following SHIFT program analysis. On a like-for-like basis, sales were up +13.6% in the first nine months supported by solid market conditions inCanada .Middle East andAfrica was up +13.0% in the first nine months and +5.0% in third quarter 2021, boosted by record sales inTurkey and sound sales inMorocco andGhana more than offsetting decline inLebanon , where the geo-political situation deteriorated in the first half and remains highly uncertain for the coming months.
| INDUSTRY & SOLUTIONS: +13.5% in 9M 2021, solid growth despite supply chain challenges
Industry & Solutions sales landed at
In the first nine months, Automation was firmly up (+38.3% year-on-year), boosted by demand in
Thanks to a record first half, Automotive harnesses business was up +29.9% in the first nine months of 2021. The business was resilient in the third quarter in virtue of premium client exposure and despite being challenged by semiconductor shortage.
| TELECOM & DATA: +5.4% in 9M 2021 continued recovery boosted by LAN & Systems
Telecom & Data sales amounted to
LAN cables and Systems rebounded by +20.7% organically in the first nine months 2021 and +8.8% in third quarter 2021 thanks to continued upturn in both in
Telecom Infrastructure was down -2.0% in the first nine months of 2021 but up +11.5% in the third quarter in line with second quarter momentum thanks to
| HIGH VOLTAGE & PROJECTS: -6.0% in 9M 2021; return to growth as expected in Q3 (+8.0% year-on-year) paving the way to a strong end of the year; adjusted
High Voltage & Projects standard sales stood at
In line with the Group’s flawless and disciplined project execution, progress was made on interconnector projects such as NSL,
| OTHER ACTIVITIES
The Other Activities segment – corresponding for the most part to copper wire sales and including corporate structural costs that cannot be allocated to other segments, such as the IFRS 16 impact for lease assets not allocated to specific activities – reported sales of
III. 2021 Outlook
Following its first nine months performance and, based on current macro-economic environment and assuming no material impact from COVID-19 and metal price increases, the Group confirms its targets for 2021 upgraded in
- EBITDA between 430 and
460 million euros ; - Return on capital employed (ROCE) between 13% and 15%;
- Free Cash Flow before M&A and equity operations between 100 and
150 million euros .
IV. Taking into account Environment, Social and Governance impact of our activities
During the third quarter,
Nexans brought together Nordic Energy Leaders to combat climate change at its second annual Nexans Climate Day inStockholm . Designed as a free debate between those who will design the electrification of the future, the Nexans Climate Day “Sustainable electrification – Making Climate Vision a Reality” brought together global energy experts to discuss the challenges in driving the sustainable electrification of the world, and the key role of the energy sector in the fight against climate change.- Engaged in sustainable purchasing practices, the Group joined the Copper Mark as a partner committed to promote responsible copper production, being the first cable manufacturer to join the organization aligned with
United Nations goals. - From a governance standpoint, upon recommendation of the
Appointments and Corporate Governance Committee , the Nexans Board of Directors has resolved to appointLaura Bernardelli as censor and propose her election as an independent director to the shareholders' meeting ofMay 11 th, 2022. If so appointed, Laura will succeedKathleen Wantz-O'Rourke .
V. Significant events since the end of September
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A conference call is scheduled today at
Webcast
https://channel.royalcast.com/landingpage/nexans/20211103_1/
Audio dial-in
We suggest connecting 10-20 minutes prior to start time of the conference call.
- 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:
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Financial calendar
About
For over a century,
The Group is a leader in the design and manufacturing of cable systems and services across four main business areas: Building & Territories, High Voltage & Projects, Industry & Solutions and Telecom & Data.
For more information, please visit www.nexans.comwww.nexans.com
Contacts:
Investor relations Aurélia Baudey-Vignaud Tel.: +33 (0)1 78 15 03 94 aurelia.baudey-vignaud@nexans.com Elodie Robbe-Mouillot Tel.: +33 (0)1 78 15 03 87 elodie.robbe-mouillot@nexans.com | Communication Catherine Garipoglu Tel.: +33 (0)1 78 15 04 78 catherine.garipoglu@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 2020 financial statements and Nexans Universal Registration Document, which includes a description of the Group’s risk factors.
1 To neutralize the effect of fluctuations in non-ferrous metal prices and therefore measure the underlying sales trend,
2 The first nine months of 2021 sales figure used for like-for-like comparisons corresponds to sales at standard non-ferrous metal prices, adjusted for the effects of exchange rates and changes in the scope of consolidation. Exchange rates and changes in the scope of consolidation impacted sales at standard non-ferrous metal prices by +€5m and -€152m respectively.
3 Adjusted subsea backlog including contracts secured not yet enforced.
4 Subject to regulatory approval.
5 Guidance confirmed for EBITDA, ROCE and FCF.
6 Excluding Chester plant in the US, closed in 2020
7 Adjusted subsea backlog including contracts secured not yet enforced.
Attachment
- Nexans_Third quarter 2021 Press release_Final
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