Scienza e Tecnologia
Nexans: Selective growth supporting 2021 performance
PRESS RELEASE
NEXANS: SELECTIVE GROWTH SUPPORTING 2021 PERFORMANCE
– Today, Nexans published its financial information for the third quarter of 2021. Commenting on the Group's achievements, Christopher Guérin, Nexans' Chief Executive Officer, said: “ Nexans confirms its solid trajectory and topline momentum supported by new value creation levers around its mission: Electrify the future. Thanks to our amplified solutions, we have initiated our strategic ambition 2022-2024 and reached first successes as our backlog is steadily up year-on-year and we confirm our 2021 financial guidance upgraded in July. Nexans has a sound and clear roadmap to become the Pure player of Electrification. In the last weeks, we have:
Nexans strives to best serve customer needs while engaging in a better future and focusing on value growth for all its stakeholders.”
CONSOLIDATED SALES BY SEGMENT
I. 9M 2021 Highlights and G eneral O perating C ontext
+ 8 .2 % organic growth in 9M 2021 compared to 9M 2020
2019-2021 Transformation Plan : Final steps
2022-2024 strategic ambition : First M&A milestone
Over the period, the Group started laying the groundwork on its three main pillars :
II. 9M 2021 Sales per Business Group
| BUILDING & TERRITORIES: + 8.4 % in 9M 2021 like-for-like reflecting selective growth in dynamic markets
Building & Territories segment sales amounted to 1,872 million euros at standard metal prices in first nine months of 2021, up +3.0% organically and +8.4% on a like-for-like basis compared to the first nine months of 2020. This market dynamic was quite strong in the European and Latin American Building markets throughout the period. The good momentum was supported by strong plant utilization and continued selective growth in line with SHIFT Performance and initiating SHIFT Prime roll-out to drive margin improvement further.
In the third quarter 2021, revenues were down -1.5% reflecting closure of Chester plant in the US in June 2020. On a like-for-like basis, sales were up +2.4% in the third quarter of 2021, reflecting sound demand in Europe, North America and Africa & Middle East despite third quarter seasonality.
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 Europe and an unfavorable base effect in Canada which had benefitted from contract renewals last year.
The first nine months trends by geographies were as follow:
| INDUSTRY & SOLUTIONS: + 13.5 % in 9M 2021 , solid growth despite supply chain challenges
Industry & Solutions sales landed at 1,007 million euros at standard metal prices in the first nine months of 2021, up +13.5% organically year-on-year supported by a record first half in Auto-harnesses business. Third quarter 2021 was up +3.1%, reflecting solid momentum in Automation while Auto-harnesses business was marginally impacted by semiconductor shortages.
In the first nine months, Automation was firmly up (+38.3% year-on-year), boosted by demand in Europe and China. Railway Infrastructure & Rolling Stock sales were down -7.5% year-on-year in virtue of lower Asian demand. Aerospace & Defense recovered strongly with sales up +9.1% in the first nine months. After several quarters of dynamic activity, in light of raw material increase, Wind Turbine activity was down (-23.9% in sales year-on-year).
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 241 million euros at standard metal prices in the first nine months of the year, up +5.4% organically (excluding Berk Tek sold in third quarter 2020) compared to first nine months of 2020 and up +11.3% in third quarter 2021 showing a rebound in demand across the three activities.
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 Asia and Europe.
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 France and Belgium continued upturn more than offsetting softer market demand in the Nordics. Pricing pressure was mitigated thanks to cost reductions and competitiveness measures.
Special Telecom (Subsea) sales continued to perform well, up +11.0% since the beginning of the year and +13.9% in the third quarter thanks to Nexans' leading position.
| 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 Subsea backlog at € 1.5bn
High Voltage & Projects standard sales stood at 520 million euros in the first nine months of 2021, down - 6.0% year-on-year, in line with project phasing and unfavorable comparative with first half 2020 which had benefitted from three repair contracts. Growth was +8.0% in the third quarter reflecting project phasing and ramp up of Charleston plant more than offsetting Skagerrak vessel maintenance. State-of-the-art Nexans Aurora cable laying vessel ceremony took place in September 2021 with clients and government officials.
In line with the Group's flawless and disciplined project execution, progress was made on interconnector projects such as NSL, Crete-Attica and Offshore Wind farm projects Seagreen and Dolwin6 EPCI contracts combining subsea and land high voltage cables, engineering and installation activities. Adjusted Subsea backlog was at 1.5 billion euros at the end of September, up +6.6% compared to June 2021. Both Halden and Charleston are fully loaded until the end of the year. Tendering activity continued to be strong in both interconnection and offshore wind projects. Benefiting from its EPCI turnkey model positioning, the Group was awarded aftermarket services for Kintyre-Hunterston and Parkwind subsea transmission cable links. Nexans' groundbreaking deep-water high voltage dynamic cable was selected for Jansz-Io Compression project in Australia.
| 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 854 million euros at standard metal prices in first nine months 2021, up +27.8% year-on-year mainly linked to strong copper wire demand in North America. The segment was down -6.8% in the third quarter reflecting Group's monitoring and reduction of external copper sales.
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 July 2021:
IV. Taking into account Environment, Social and Governance impact of our activities
During the third quarter, Nexans made significant progresses towards its ambitious Corporate Social Responsibility strategy and commitment to contribute to carbon neutrality:
V. Significant events since the end of September
October 14 - TotalEnergies chooses Nexans solar trackers to recycle a landfill site into a solar farm. Nexans innovative KEYLIOS solar trackers were installed at the La Fenasse site, a former Technical Landfill Center located near Béziers in southwestern France, which is currently being converted to a 1.6 MW solar photovoltaic (PV) farm.
October 5 - Nexans has won a contract with Parkwind to provide turnkey business continuity services to four of its offshore wind farms in Belgium. The five-year partnership will see Nexans providing a range of services such as pre-engineering of potential repair scenarii, periodic spare inspections and emergency response time of repair vessel in case of contingency situation on both inter-array and export cables.
October 4 - Nexans is awarded a significant turnkey contract to supply and install a groundbreaking deep-water high voltage dynamic cable solution for the Jansz-Io Compression (J-IC) project operated by Chevron Australia.
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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/20211103_1/
Audio dial-in
We suggest connecting 10-20 minutes prior to start time of the conference call.
Confirmation code: Nexans
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Financial calendar
February 16, 2022: 2021 full-year earnings
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 38 countries, the Group is leading the charge to the new world of electrification: safe, sustainable, renewable, decarbonized and accessible to everyone. In 2020, Nexans generated 5.7 billion euros in standard sales.
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.
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 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 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.
Adjusted subsea backlog including contracts secured not yet enforced.
Subject to regulatory approval.
Guidance confirmed for EBITDA, ROCE and FCF.
Excluding Chester plant in the US, closed in 2020
Adjusted subsea backlog including contracts secured not yet enforced.
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