Scienza e Tecnologia
A strong start to the year, paving the way to Nexans' full potential
PRESS RELASE
A STRONG START TO THE YEAR ,
PAVING THE WAY TO NEXANS' FULL POTENTIAL
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Paris, April 2 7 , 202 2 – Today, Nexans published its financial information for the first quarter of 2022. Commenting on the Group's highlights, Christopher Guérin, Nexans' Chief Executive Officer, said: “ During the first quarter, our priority was the safety of the teams working for our Automotive Harness es business in Western Ukraine . Our sites continued to operate at over 85% of their nominal capacity, and business is now back to normal, which is remarkable in the context of the war. At present, we can only hope for a cessation of hostilities as soon as possible and a return to diplomacy in the country .
Group-wide , we started the year with exceptional ly 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 program s , 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 Latin America , a USD 3 39 m illion Company generating USD 29 million in EBITDA , pre- synergy . This marks t he first key milestone in Nexans ' strategy to become a Pure player of the sustainable e lectrification of the world . ”
CONSOLIDATED SALES BY SEGMENT
I. Q1 202 2 Highlights
and G eneral O perating
C ontext
Strong start to the year : + 6. 1 % organic growth Q1 202 2 vs. Q1 202 1
“Winds of change” 2022-2024 : paving the way to full potential
Nexans' 2022-2024 plan announced in February 2021 is on schedule. During the quarter, the Group progressed with its main strategic steps towards Electrification:
II. Q1 202 2 Sales per Business Group
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:
ELECTRIFICATION BUSINESSES: +21.4% ORGANIC GROWTH IN Q1 2022
| GENERATION & TRANSMISSION ( FORME R LY 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 United States and Nexans' two cable laying vessels Nexans Aurora and Skagerrak. During the quarter, progress was made mainly on the Seagreen, Crete-Attica and Mindanao-Visayas turnkey projects.
The segment witnessed solid and healthy momentum in terms of order, in line with its risk-yield analysis and selectivity policy. The adjusted backlog stood at 2.4 billion euros at the end of March 2022 (up +52% compared to March 2021), with strong visibility and fully loaded Halden and Charleston plants for 2022.
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 France and installation contract for the Revolution offshore wind farm in the United States.
| DISTRIBUTION ( FORME R LY TERRITORIES) : + 1 4 . 9 % in Q1 202 2 reflecting growing grid investment
Distribution sales amounted to 241 million euros at standard metal prices in first quarter 2022. Over the period, the segment recorded +14.9% organic sales growth from growing grid investments across North America and Europe. ULTRACKER offer performed well, benefiting from key client adoption. The accelerated sales growth witnessed evidenced the benefits of offering beyond the cable solutions.
The quarterly trends by geography were as follows:
| USAGES ( FORME R LY BUILDING) : + 1 4 . 8 % in Q1 202 2 reflecting value growth supported by robust demand and pricing agility
Usage s sales amounted to 439 million euros at standard metal prices in first quarter 2022. Organic growth amounted to +14.8% compared to the same period of 2021, supported by a booming North American market, solid demand momentum in Europe and Africa & Middle East. MOBIWAY and ULTRACKER offers, launched globally as part of the Amplify program, saw good adoption as clients increasingly recognize the value of leveraging innovative products and end-to-end solutions.
Quarterly trends by geography were as follows:
NON-ELECTRIFICATION BUSINESSES: + 7.1 % ORGANIC GROWTH IN Q1 2022
| INDUSTRY & SOLUTIONS: + 5. 5 % in Q1 202 2 reflecting sustained growth despite headwinds
Industry & Solutions sales amounted to 367 million euros at standard metal prices in the first quarter of 2022, up +5.5% organically year-on-year supported by sustained demand in Auto-harnesses and Automation markets.
Automation remained robust (up +15.6% year-on-year), boosted by demand in Southern Europe and Asia and the launch of the SHIFT Prime program. Railway Infrastructure & Rolling Stock sales were down -18.2% year-on-year due to lower Asian demand. Aerospace & Defense witnessed signs of recovery (+19.7% year-on-year).
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 Western Ukraine running at around 85%.
| TELECOM & DATA: +14 . 3 % in Q1 202 2 with an upward trend in Special Telecom and Infrastructure
Telecom & Data sales amounted to 86 million euros at standard metal prices in first quarter 2022, up +14.3% organically compared to first quarter 2021, showing an improvement in Telecom Infrastructure and sustained demand in Special Telecom.
LAN cables and S ystems was down by -8.1% in the first quarter 2022 compared to first quarter 2021 due to soft demand in the Middle East and greater selectivity following the implementation of the SHIFT Performance program.
Telecom Infrastructure rebounded by +12.0% supported by good momentum in France, Belgium and the Nordics.
Thanks to its backlog, sales were up +44.3% in the Special Telecom (Subsea) business year-on-year.
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 267 million euros at standard metal prices in first quarter 2022, down -26.3% year-on-year in line with Nexans' strategy to focus on its internal needs.
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:
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:
V. Significant events since the end of March
On April 1 - Nexans announced the successful completion of its acquisition of Centelsa, a premium cable manufacturer in Latin America specializing in building and utilities applications from Xignux S.A. (headquartered in Mexico) following receipt of regulatory clearance.
On April 7 – Nexans announced the appointment of Jean-Christophe Juillard as Deputy Chief Executive Officer effective April 4, 2022. He will continue in his role of Chief Financial Officer in charge of Finance and Information Systems.
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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/20220427_1/
Audio dial-in
Confirmation code: Nexans
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Financial calendar
May 11, 2022: Annual Shareholders' Meeting
May 16, 2022: Dividend – Ex date
May 17, 2022: Dividend – Record date
May 18, 2022: Dividend – Payment date
July 27, 2022: 2022 Half Year Results
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 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 is the first company of 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
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 202 1 financial statements and Nexans Universal Registration Document, which includes 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.
Guidance confirmed for EBITDA and Normalized free cash flow.
At constant scope on sales at standard non-ferrous metal prices. Detailed impact of changes are available in appendix.
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.
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
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