Scienza e Tecnologia
NEXANS: HEAD START TO THE YEAR
PRESS RELASE _
NEXANS: HEAD START TO THE YEAR
Quarterly sales growth setting
robust basis for the year
F inal steps to “New
Nexans ” 2019-2021 Transformation Plan
SHIFT transformation program structural tailwind
across all operations
Uniquely placed to build on United States Offshore Wind momentum
Laying groundwork of Nexans strategic ambition to Electrify the Future
Paris, April 29 ,
2021 – Today, Nexans published its financial information for the first quarter of 2021. Commenting on the Group's performance, Christopher Guérin, Nexans' Chief Executive Officer, said:
“ The sound start to the year
upholds demand momentum , as much as it supports
the gradual and sequential improvement through the rest of
the year and the 2 021 financial
guidance . We continue d to focus on value
growth and f ree cash flow conversion .
We increas ed prices in line with first sequential raw material inflation
using pass-through mechanisms and our unique in-house SHIFT methodology . We r emain ed selective on the quality of our backlog (customers, projects, products profile) increasing it by +20% and improv ing embedded margin ratio .
As we are finalizing our 2019-2021 transformation plan , we are setting the groundwork for our strategic ambition :
i ) w e have signed five strategic partnerships to support our AMPLIFY innovation model , ii)
uniquely positioned ourselves in the US Offshore Wind market an d , iii) l aunch ed worldwide our
MOBIWAY ™ offer for the Building sector .”
CONSOLIDATED SALES BY SEGMENT
I. Q1 2021 Highlights and
G eneral O perating
C ontext
Head start to the year : +1.4% organic growth Q1 2021 vs. Q1 2020
Executing final steps to “ New Nexans ” 2019-2021 Transformation Plan
L aying the groundwork for Nexans' 2022-2024 strategic ambition : Electrify the Future
During the quarter, the Group started lay ing the groundwork on three main pillars :
II. Q1 2021 Sales per Business Group
| BUILDING & TERRITORIES: + 3 . 3 % in Q1 2021 excluding the closure of Chester plant in the US, supported by strong rebound in South America and robust demand in the Middle East and Africa
Building & Territories segment sales amounted to 615 million euros at standard metal prices in first quarter 2021, including the closure of Chester plant organic growth landed at -2.0% compared to the same period of 2020. Sales were sequentially up +2.8% compared to fourth quarter 2020 supported by a recovery in demand in most geographies and, in certain regions, by customer stocking in anticipation of further raw material price increase.
Over the period, the Building segment was resilient in line with gradual catch-up in demand following 2020 disruption due to the Covid-19 constraints. While the Territories (Utilities) activity was mixed across geographies with robust demand in China and France and weaker sales in the Nordics against last year.
The quarterly trends by geographies were as follow:
| INDUSTRY & SOLUTIONS : + 5.8 % in Q1 2021 boosted by auto-harnesses record demand and Automation rebound
Industry & Solutions sales landed at 344 million euros at standard metal prices in the first quarter of 2021, up +5.8% organically year-on-year and +10.9% sequentially supported by a record quarter in auto-harnesses. Aerospace remains challenged by the Covid-19 crisis.
Railway Infrastructure & Rolling Stock sales increased (+4.8% year-on-year) in virtue of the sustained demand related to the construction of subway lines in China and Europe, Aerospace & Defense (-39.7% year-on-year) and Oil & Gas (-15.6% year-on-year) remained challenged while Automation was strongly up (+46.1% year-on-year) boosted by demand in Europe. Wind Turbine activity was down (-19.6% in sales year-on-year) on strengthened Nexans project selectivity.
Automotive harnesses was strongly up by +17.9% in the first quarter. Sales reached a new record high in virtue of catch-up in demand from China and growing market shares of electrical vehicles supported by Government subsidies. A first contract in body harnesses has been awarded and will secure the growth momentum.
| TELECOM & DATA: - 4.2 % in Q1 2021 with LAN cables and Systems recovery , continued soft demand in Fiber
Telecom & Data sales amounted to 74 million euros at standard metal prices in first quarter 2021, down -4.2% organically compared to first quarter 2020 and up +2.2% sequentially showing an improvement in LAN cables and Systems while still impacted negatively by soft demand in fiber optical infrastructure cable and accessories.
LAN cables and S ystems rebounded by +19.4% in the first quarter 2021 compared to first quarter 2020 with activity benefitting from the upturn in Asia, Europe and the delivery of major projects in Middle East.
Telecom Infrastructure was down -17.2% remaining impacted by project delays, pursued customer demand on Fiber-to-the-home and low backbone orders with intense price pressure due to Asian imports.
Thanks to the solid demand and Nexans' leading position, sales were up +12.1% in the Special Telecom (Subsea) business year-on-year and backlog remained strong.
| HIGH VOLTAGE & PROJECTS : -2 4 . 7 % in Q1 2021 in light of unfavorable Q1 2020 comparable ; adjusted Subsea backlog at € 1.5bn and project execution remain ed strong
High Voltage & Projects standard sales stood at 147 million euros in the first quarter of 2021, down -24.7% year-on-year. The division bears a high comparative as first quarter 2020 sales were up +56% compared to first quarter 2019, reflecting the execution of two repair contracts and favorable phasing of projects. Sales will accelerate progressively throughout 2021, reflecting project phasing, completion of the Charleston plant in the US and delivery of the state-of-the-art Nexans Aurora cable laying vessel.
Subsea high-voltage was down -29.4% in the first quarter 2021, affected by a strong base effect as stated above. In line with the Group's flawless and disciplined project execution, progress was made mainly on the turnkey projects Seagreen, Crete-Attica, NSL, Mindanao-Visayas and Lavrion-Syros. Adjusted Subsea backlog was at 1.5 billion euros at the end of March (up +11.5% compared to December 2020), with a 24-month visibility and fully loaded Halden plant in 2021. Tendering activity continued to be strong, Nexans was selected as preferred supplier by Empire Offshore Wind LLC to electrify the future of New York State, connecting the Empire Offshore Wind Farms to the onshore grid.
In parallel, the Charleston plant transformation extension progressed according to plan and Nexans Aurora vessel is on-track for delivery in May.
Land high-voltage was slightly down -3.3% in the first quarter 2021. Project execution was in line with backlog phasing. Operations continued to go as planned after the successful turnaround of the unit last year.
| OTHER ACTIVITIES
The Other Activities segment – corresponding for the most part to copper wire sales – reported sales of 323 million euros at standard metal prices in first quarter 2021, up +25.9% year-on-year mainly linked to strong copper wire demand in North America.
III. Executing final steps “New Nexans” 2019-2021 Plan
The Group continued to execute its “New Nexans” transformation plan launched in November 2018 and deployed Group-wide by reinforcing cost reduction measures and amplifying the SHIFT program to increase portfolio conversion of value burners and transformation candidates to profit drivers as well as enhancing cash optimization. Focus on operating working capital and customer selectivity on all commercial opportunities and turnkey projects is now embedded within units to improve profitability in all environments.
In a context of raw material price inflation, focus on copper and other raw material was enhanced across the Group to secure procurement, ensure supply avoiding any shortage and pass-through price increase.
IV. “ Electrify the Future ” 20 22 -2024 Strategic
ambition
Nexans is actively pursuing initiatives to amplify innovation and partnership programs to offer beyond the cable solutions to its customers. During the quarter, Nexans achieved leading digital, innovation and risk management partnerships with:
V. Sustainability impact
Nexans will lead the electrification of the future in a sustainable way. As announced during its Climate Day on September 22, 2020, Nexans is committed to reach carbon neutrality by 2030 .
During the quarter the Group made significant progress to achieve its year-end targets:
VI. Significant events since the end of March
On April 1 - Nexans has extended its long-term partnership with RATP by winning a two-year contract to supply around 4,800 km of rail cable for infrastructure and on-board installation for projects including the Grand Paris Express.
On April 22 – Nexans has partnered with French skipper Fabrice Amedeo. Sharing many values related to environmental protection, the fight against global warming and the preservation of oceans, Nexans and Fabrice Amedeo are teaming up until the next Vendée Globe race in 2024.
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A conference call is scheduled today at 9:00 a.m. CET. Please find the access details:
Webcast
https://channel.royalcast.com/landingpage/nexans/20210429_1/
Audio dial-in
Confirmation code: Nexans
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Financial calendar
May 12, 2021: Annual Shareholders' Meeting
May 19, 2021: Dividend – Ex date
May 20, 2021: Dividend – Record date
May 21, 2021: Dividend – Payment date
July 28, 2021: 2021 Half Year Financial Information
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
Nexans is a global player in energy transition. Our purpose: electrify the future. For over a century, Nexans has played a crucial role in the electrification of the planet. With around 25,000 people in 38 countries, the Group is leading the charge to the new world of electrification: safer, sustainable, renewable, decarbonized and accessible to everyone. In 2020, Nexans generated 5.7 billion euros in standard sales.
The Group designs solutions and services along the entire value chain in three main business areas: Building & Territories (including utilities and emobility), High Voltage & Projects (covering offshore wind farms, subsea interconnections, land high voltage), and Industry & Solutions (including renewables, transportation, oil and gas, automation, and others).
Corporate Social Responsibility is a guiding principle of Nexans' business activities and internal practices. As a signatory of the Global Compact since 2008, Nexans is committed to contribute to a responsible global economy and strives to promote the ten principles defined by the UN to all its stakeholders. The Group pledged to contribute to carbon neutrality by 2030 and was the first cable provider to create a Foundation supporting sustainable initiatives bringing access to energy to disadvantaged communities worldwide.
Nexans' commitment to developing ethical, sustainable and high-quality cables also drives its active involvement within leading industry associations, including Europacable, the NEMA, ICF and CIGRE.
Nexans is listed on Euronext Paris, compartment A.
For more information, please visit 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 2020 financial statements and Nexans Universal Registration Document, which includes a description of the Group's risk factors .
To neutralize the effect of fluctuations in non-ferrous metal prices and therefore measure the underlying sales trend, Nexans also calculates its sales using standard prices for copper (standard price at 5,000 €/t) and aluminum (standard price at 1,200 €/t).
The first quarter 2020 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 -€25m and -€62m respectively.
Adjusted subsea backlog including contracts secured not yet enforced.
Adjusted subsea backlog including contracts secured not yet enforced.
Greenhouse Gas (GHG) emissions for scopes 1 and 2 as well as part of scope 3 relating to business travel, employee commuting, waste produced, as well as upstream and downstream transport, as defined by the GHG protocol – ghgprotocol.org. The targets are based on the reduction of emissions of 2019, the base year.
Attachment
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