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
- Strong
and selective
value growth across all
businesses, setting
a robust basis
for the year
- 2022
guidance confirmed
- Successfully
managing a challenging
environment -
Auto-harness
Ukraine units
maintained at 85%
capacity in Q1, now back to
100%
- Implementing the
2022-2024 “Winds of change”–
reorganized businesses around
six segments
- Completion of
the Centelsa acquisition
in Colombia early April
~ ~ ~
- Standard sales stood at 1,623
million euros, up +6.1% organically compared to first-quarter 2021
and +16.3% organically excluding Metallurgy, reflecting robust
demand across markets and an acceleration in electrification trends
globally
- Demand drove healthy backlog growth
(+19% year-on-year) with Generation & Transmission adjusted
backlog1 at 2.4 billion euros up +52% compared to March 2021
- Excellent
customer traction for our services and solutions and
customer-focused innovations continued apace as part of our SHIFT
Prime and Amplify programs
- Safety of our
people and continuity of Auto-harnesses operations ensured in the
Western Ukraine with units output and delivery capacities
maintained at 85% during the quarter and organic standard sales
growth of +16% in Auto-harnesses activity
- Cost pass
through mechanism, successful monitoring of supply chain challenges
and disciplined pricing measures supported margins
- S&P rating
upgraded to BB+ confirming the Group’s successful
transformation
- 2022 guidance2
confirmed, supported by selective sales growth and transformation
program
Paris, April
27,
2022 – 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 Harnesses
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
exceptionally 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 programs, 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 USD339 million
Company generating USD29 million in EBITDA, pre-synergy. This marks
the first key milestone in Nexans’ strategy to become a Pure player
of the sustainable electrification of the world. ”
CONSOLIDATED SALES BY SEGMENT
(in millions of euros)At standard metal
pricesCopper reference at €5,000/t |
Q1 20213 |
Q1 2022 |
|
Organic growth Q1 2022
vs. Q1 2021 |
Sequential growth
Q1 2022 vs. Q4
2021 |
Generation & Transmission (High Voltage & Projects) |
147 |
222 |
|
+47.1% |
-20.2% |
Distribution (Territories) |
205 |
241 |
|
+14.9% |
+10.7% |
Usages (Building) |
389 |
439 |
|
+14.8% |
+13.0% |
Industry & Solutions |
344 |
367 |
|
+5.5% |
+1.9% |
Telecom & Data |
74 |
86 |
|
+14.3% |
+8.0% |
Other Activities |
343 |
267 |
|
-26.3% |
+11.2% |
Group total |
1,503 |
1,623 |
|
+6.1% |
+3.7% |
I. Q1
2022 Highlights
and General
Operating
Context
Strong start to the
year:
+6.1% organic
growth Q1 2022 vs. Q1
2021
- In the
first quarter of 2022, sales at standard metal prices were at 1,623
million euros, up +6.1% organically compared to the first quarter
of 2021, reflecting Nexans’ structural strengths and robust demand
across businesses. The Group benefitted from strong demand across
electrification markets, up +21.4% year-on-year, and continued the
reduction in metallurgy external sales, achieving +16.3% organic
growth excluding Metallurgy business.
- Nexans is
closely monitoring developments in Ukraine and the surrounding
region. First priority remains the safety and security of its
employees at its three Auto-harness plants located in the Western
Ukraine and to providing them with all the necessary assistance.
Throughout the quarter these plants were able to operate at around
85% capacity.
- Solid and
healthy order momentum was maintained, with the Group backlog up
+19% year-on-year and several contract awards in energy transition
markets, reflecting renewable energy trends as well as Nexans’
subsea excellence.
- During
the quarter, the Group successfully balanced cost inflation with
pass through and pricing measures across all operations.
- S&P
rating was upgraded to BB+ confirming the Group’s successful
transformation and solid balance sheet.
- 2022
Guidance confirmed: EBITDA between 500 and 540 million euros;
Normalized Free Cash Flow4 between 150 and 200 million euros at
constant scope.
“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:
- The Group
completed the acquisition of the world-class cable manufacturer
Centelsa in Latin America on April 1 after obtaining antitrust
clearance from Colombian authorities;
- Progress has
been made on SHIFT Prime program, with the enhancement of a
customer centric culture, the set-up of Design Labs, innovation
processes and an Offer Management Cycle for the scale-up. As of
today, the program has been rolled out in nine business units
across 16 countries. In parallel, the team finalized the
implementation of Nexans’ tailor made Accelerator tool to ensure
continuous project management and performance monitoring of
initiatives launched;
- As part of its
Amplify ans SHIT Prime programs, the Group launched its global
ULTRACKER offering in the first quarter, with good customers
traction, and ramped up the duplicated global offers launched last
year;
- The Group
continued to reduce its external metallurgy sales to focus on its
internal needs.
II. Q1
2022 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:
-
“Generation &
Transmission” covering the former “High
Voltage & Projects” segment;
- “Building &
Territories” segment is divided into its two components:
-
“Distribution” formerly “Territories (Utilities)”
to include medium-voltage cables and accessories,
-
“Usages”,
formerly “Building”, to include low-voltage cables
-
“Other
activities” to include the metallurgy
activities, notably the activity in South America previously
included in the Building & Territories segment and representing
19 million euros of standard sales in the first quarter of 2022.
The scope is detailed in the appendix;
-
“Industry &
Solutions” and
“Telecom &
Data” segments remain unchanged.
ELECTRIFICATION BUSINESSES:
+21.4% ORGANIC GROWTH IN Q1
2022
| GENERATION &
TRANSMISSION
(FORMERLY
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 backlog5 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
(FORMERLY
TERRITORIES):
+14.9%
in Q1 2022 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:
-
Europe was up +11.1% reflecting contract renewals
and robust demand. The Nordics benefitted from mild weather while
sales in Greece were down before the launch of contract renewed at
the end of 2021.
-
South America was stable at -0.4% in first quarter
2022 compared to first quarter 2021.
-
Asia Pacific was up +5.8% during the quarter.
Australia and New Zealand delivered sound growth supported by a
recovery in demand, while China suffered from locally imposed
lockdowns.
-
North America was up sharply by +111.2% thanks to
a booming market and Nexans’ solid position.
-
Middle East and Africa was up +4.1% reflecting an
upward trend in Morocco.
| USAGES
(FORMERLY
BUILDING):
+14.8%
in Q1 2022
reflecting value
growth supported by
robust demand and pricing agility
Usages 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:
-
Europe grew +6.8% in first quarter 2022 compared
to first quarter 2021. The growth was supported by robust demand,
new product launches and amplified solutions as well as disciplined
pricing across the region.
-
South America was down -4.0% during the quarter,
affected by a high base effect as the region benefited from a
strong rebound and stocking last year.
-
Asia Pacific was down -4.9% in
first quarter 2022 compared to first quarter 2021 with Oceania
affected by lockdowns.
-
North America was up by a strongly +70.5%
reflecting booming construction market demand and Nexans’ leading
position in the region.
-
Middle East and Africa was up +38.8% boosted by a
sustained performance in West Africa and Morocco and recovery
trends in Lebanon and Turkey.
NON-ELECTRIFICATION BUSINESSES:
+7.1% ORGANIC
GROWTH IN Q1 2022
| INDUSTRY &
SOLUTIONS:
+5.5%
in Q1 2022
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 2022
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
Systems 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:
- EBITDA between
500 and 540 million euros;
- Normalized Free
Cash Flow6 between 150 and 200 million euros.
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:
- In France,
Nexans scored 85 out of 100 points in the 2021 Professional
Equality Index, stable compared to 2020. The Group is committed to
gender equality and targets 18%-21% of women in top management
positions by 2023.
- Nexans joined,
as Gold Partner, the Edison Innovation Foundation’s Thomas Edison
Pitch Contest, open to students in grades 4 through 12. Created in
2010, the contest promotes project-based STEM learning and
encourages invention, innovation, and entrepreneurship among
students before they get to college.
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.
~ ~ ~
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
- International
switchboard: +44 (0) 33 0551 0200
- France: +33 (0)
1 7037 7166
- United Kingdom:
+44 (0) 33 0551 0200
- United States:
+1 212 999 6659
Confirmation code: Nexans
~ ~ ~
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:
Financial communication Elodie
Robbe-MouillotTel.: +33 (0)1 78 15 03
87elodie.robbe-mouillot@nexans.com |
CommunicationElyette RouxElyette.roux@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 2021 financial statements and
Nexans Universal Registration Document, which includes a
description of the Group’s risk factors.
1 Adjusted backlog including subsea and land
contracts secured but not yet enforced in the former High Voltage
& Projects segment.2 Guidance confirmed for EBITDA and
Normalized free cash flow.3 At constant scope on sales at standard
non-ferrous metal prices. Detailed impact of changes are available
in appendix. 4 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.5 Adjusted backlog including contracts secured but not
yet enforced6 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.
- Nexans_First quarter 2022 Press release_Final
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