Scienza e Tecnologia
NEXANS: CONTINUED STRONG MOMENTUM, 2022 GUIDANCE UPGRADED
PRESS RELEASE
NEXANS: CONTINUED STRONG MOMENTUM
2022 GUIDANCE UPGRADED
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Paris, October 26 , 202 2 – Nexans announced today its financial information for the third quarter of 2022. Commenting on the Group's highlights, Christopher Guérin, Nexans' Chief Executive Officer, said: “ I am delighted to confirm, Nexans solid financial trajectory and topline momentum, supported by our disruptive SHIFT transformation program, and our solutions new offering.
Nexans' E lectrification businesses has generated an outstanding organic growth of + 16 . 2% for the last nine months versus 2021 same period. Our E innovative model is now deployed across almost all units, in order to find the right business performance balance among Economic, Environment & Engagement. We continue to convert healthy,” risk-controlled” contracts for our Generation & Transmission backlog. In addition, as sole U . S based cable manufacturer, we remain a “top of mind” partner for the ever growing U . S . based o ffshore windfarms industry, like the new EPCI c ontract for Empire Wind 1 recently signed with Equinor and bp .
Today, our solid and structural performance is the bedrock upon which we have decided to upgrade, for the second time in 2022, our full-year financial guidance. ”
CONSOLIDATED SALES BY SEGMENT
I. Q 3 202 2 HIGHLIGHTS
Executing Electrification Pure Player strategy
To unlock Nexans' full potential, to deliver benchmark results at scale, and to become the most profitable company in the sector, the transformation platform is running at full speed for all units in the Electrification and Industry & Solutions businesses. This transformation platform (SHIFT Performance, SHIFT Prime and Amplify programs) enables Nexans to deliver sustainable results and has equipped the units to be recession-proof.
As part of its SHIFT Prime program, the Group is actively working on growing its connected objects and users to engineer a new recurring revenue model supported by continued innovation with added-value products and solutions. The Group now has more than 380,000 connected users and more than 30,000 connected objects globally.
During the quarter, the Group also made significant progress on its integration roadmap with Centelsa in Latin America with the announcement of the new brand to customers and partners.
Leading the way to a more sustainable future
For Nexans, sustainability encompasses continuous improvement of combined E (Economic, Environmental and Engagement) dimensions across the Group's entire value chain and ecosystem. This holistic approach to sustainability was illustrated during multiple sustainability events hosted during the quarter:
II. 9M 202 2 SALES PER BUSINESS GROUP
ELECTRIFICATION BUSINESSES: + 1 6 .2 % ORGANIC SALES GROWTH IN 9M 2022
| GENERATION & TRANSMISSION ( FORME R LY HIGH VOLTAGE & PROJECTS ) : E xcellent momentum driving record healthy backlog
Generation & Transmission recorded organic sales growth of +17.2% over the first nine months of 2022 compared to the same period of 2021. The segment benefitted from the contribution of the Charleston plant, the only subsea high voltage manufacturing plant in the United States. During the third quarter, manufacturing and installation progress was made mainly on the Seagreen, Crete-Attica and South Fork projects.
The segment witnessed solid and healthy momentum in terms of orders, in line with its risk-yield analysis and selectivity policy. The adjusted backlog reached a record high of 2.4 billion euros at the end of September 2022 (up +55% compared to end-September 2021), with strong visibility and fully loaded Halden and Charleston plants until 2023.
Nexans was awarded several projects in energy transition markets, reflecting booming renewable energy trends as well as the Group's turnkey capabilities and ground-breaking assets. These include a turnkey contract for the Borwin6 offshore wind farm in Germany and a manufacturing contract for the Revolution offshore wind farm in the United States as part of the frame agreement with Orsted.
| DISTRIBUTION ( FORME R LY TERRITORIES) : + 1 4 . 9 % sales growth in 9M 202 2 reflecting value growth in all geographies
Distribution sales amounted to 828 million euros at standard metal prices in the first nine months of 2022, of which 41 million euros contributed by Centelsa. Over the period, the segment recorded +14.9% organic sales growth as a result of growing grid investments across North America and Europe.
Trends by geography for the first nine months were as follows:
| USAGES ( FORME R LY BUILDING) : + 1 6 . 5 % value growth in 9M 202 2 reflecting outstanding performance s in all markets
Usages sales amounted to 1,403 million euros at standard metal prices in the first nine months of 2022, including 78 million euros contributed by Centelsa. Organic sales growth was +22.0% in the third quarter of 2022 compared to the previous year on the back of solid demand across all geographies mainly driven by conjunctural effects in some countries and deployment of solutions in others.
The trends by geography for the first nine months of 2022 were as follows:
NON-ELECTRIFICATION BUSINESSES: + 11.5 % ORGANIC SALES GROWTH IN 9M 2022
| INDUSTRY & SOLUTIONS: + 13.4 % in 9M 202 2 reflecting sustained growth despite headwinds
Industry & Solutions sales amounted to 1,163 million euros at standard metal prices in the first nine months of 2022, up +13.4% organically year-on-year, supported by outstanding demand in Auto-harnesses and Automation markets. Sales were up by a strong +26.4% in third-quarter 2022 compared to third-quarter 2021.
Automation remained robust (up +18.8% year-on-year), boosted by demand in Southern Europe and Asia and the launch of the SHIFT Prime program. In Mobility sales grew by +2.6% supported by strong trends in Shipbuilding, while Rolling Stock was negatively impacted by lockdowns in China and Aerospace pursued its recovery.
Automotive H arnesses was up by a strong +22.8% organically in the first nine months of 2022. Sales were up +37.1% in the third quarter reflecting growing market shares despite the Ukrainian crisis. This outstanding performance by the business has been recognized by customers. Its long term perspectives have been strengthened by the duplication of manufacturing activities to ensure business continuity and major contracts for full cabling of electrical vehicles.
| TELECOM & DATA: + 3.5 % in 9M 202 2 on the back of softer Special Telecom in Q3 2022
Telecom & Data sales amounted to 253 million euros at standard metal prices in the first nine months of 2022, up +3.5% organically compared to the first nine months of 2021 and down -6.6% in the third quarter of 2022, reflecting a declining third quarter in Special Telecom following solid backlog execution.
LAN cables and Systems reported good momentum in Europe while Asia was affected by lockdowns.
Telecom Infrastructure was up +3.1% organically in the first nine months of 2022 with European operations supported by sound business momentum in the United Kingdom, offsetting the soft start to the year on the French market. The third-quarter performance is reflecting customer inventories in Europe.
Special Telecom (Subsea) sales were up +12.5% compared to the first nine months of 2021. Business was down -19.5% in third-quarter 2022 reflecting strong backlog execution during prior quarters while return to growth is expected in the fourth quarter.
OTHER ACTIVITIES (MAINLY METALLURGY) : -22.2 % ORGANIC SALES GROWTH IN 9M 2022
| OTHER ACTIVITIES
The Other Activities segment – corresponding for the most part to copper wire sales – reported sales of 776 million euros at standard metal prices in the first nine months of 2022, down -22.2% year-on-year in line with Nexans' strategy to scale down this business and focus on internal needs. The segment was down -20% in the third quarter.
III. SIGNIFICANT EVENTS SINCE THE END OF SEPTEMBER
On October 2 6 – Nexans signed a new 800 million euro multi-currency revolving credit facility agreement with a group of 13 banks to replace the existing undrawn credit facility agreement signed on December 12, 2018 for 600 million euros . The facility continues to strengthen Nexans' financial liquidity and has a term of five years with two one-year extension options.
On October 2 6 – Invexans Limited UK renewed its commitment to remain a long-term partner and a reference shareholder of Nexans.
On October 6 – Nexans received final order for phase one of the Empire Wind Project being developed by a 50-50 partnership between Equinor and bp. This follows the Preferred Supplier Agreement signed in March 2021, which prompted several months of collaborative work to negotiate a turnkey contract, covering the design and manufacturing, as well as the laying and protection of export cables for the project.
IV. 2022 OUTLOOK
Against an uncertain geopolitical and economic backdrop, the Group is confident in the continuation of its performance momentum and will maintain a policy of cost control and selective investment. Nexans' strategy will remain focused on value growth over volume to keep unleashing profit from its unique transformation platform, as well as its investments in the growing Generation & Transmission market. Nexans is only at the beginning of its journey towards premiumization through the development of value added systems and solutions for its end-users.
In this context, Nexans upgrades its guidance for 2022, excluding acquisitions and divestments:
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A conference call is scheduled today at 9:00 a.m. CET. Please find below the access details:
Webcast
https://channel.royalcast.com/landingpage/nexans/20221026_1/
Audio dial-in
Confirmation code: Nexans
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Financial calendar
February 15, 2023: 2022 full-year earnings
Appendice s (in millions of euros)
Impact of changes in the scope of consolidation and exchange rates on sales at
standard non-ferrous metal prices
Copper standard of €5,000/t
About Nexans
For over a century, Nexans has played a crucial role in the electrification of the planet and is committed to electrifying 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 6.1 billion euros in standard sales. The Group is a leader in the design and manufacturing of cable systems and services across five main business areas: Energy Generation & Transmission, Distribution, Usages, Industry & Solutions and Telecom & Data. Nexans was the first company in its industry to create a Foundation supporting sustainable initiatives bringing access to energy to disadvantaged communities worldwide. The Group pledged to contribute to carbon neutrality by 2030.
Nexans. Electrify the future.
Nexans is listed on Euronext Paris, compartment A.
For more information, please visit www.nexans.com
www.nexans.com
Contacts:
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 2022 half-year report and 2021 Universal Registration Document, which include a description of the Group's risk factors .
Adjusted backlog including subsea and land contracts secured but not yet enforced in the former High Voltage & Projects segment.
At constant scope on sales at standard non-ferrous metal prices. Detailed impact of changes are available in appendix.
Adjusted backlog including contracts secured but not yet enforced
Organic growth
5 Free Cash Flow excluding strategic capex, disposal of property, plant and equipment, impact of material activity closures and assuming project tax cash out based on completion rate rather than termination.
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