Nexans Sa · EURONEXT:NEX
Nexans Sa — Investor Day (November 2024)
84 slides from Nexans Sa's investor day presentation, November 2024
Slide 1: Sparking Electrification with Tech solutions
CAPITAL MARKETS DAY 2024 Sparking Electrification with Tech solutions
Slide 2: Safe Harbour
Safe Harbour This presentation 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 also invited to visit the Group’s website where they can view and download
Slide 3: Accelerating the sustainable revolution
0.1 Accelerating the sustainable revolution Christopher Guérin CEO INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 3
Slide 4: History of Electricity
DEVELOPED (1890-1910) (1950-1970) (2020-2040) ECONOMIES FIRST ELECTRIC REVOLUTION SECOND ELECTRIC REVOLUTION THIRD ELECTRIC REVOLUTION ‒ TRANSITION TO RENEWABLE ENERGIES ‒ RENEWAL OF ELECTRICITY GRIDS ‒ ELECTRIFICATION OF OUR DAILY LIVES 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 20
Slide 5: Electrification is expected to accelerate across all end-segments
Electrification is expected to accelerate across all end-segments PWR-TRANSMISSION PWR-GRID PWR-CONNECT CABLES AND SYSTEMS MARKET (€BN) AND 2023-2028 CAGR (%) +7% +5% p.a. p.a. +10% p.a. €37Bn €94Bn €74Bn €26Bn €26Bn €16Bn 2023 2028E 2023 2028E 2023 2028E NEW DEMAND DRIVEN BY NEW DEMAND DRIVEN BY NE
Slide 6: Mega Trends
~50% OF THE WORLD’S 500 BIGGEST COMPANIES ARE PUTTING A PRICE ON CARBON WITHIN THE NEXT TWO YEARS ~86% +85% Mega OF CARS WILL BE ELECTRIC BY 2050 ON GLOBAL INSTALLED DATA CENTER CAPACITY (2023-28 IN MW) Trends driving long-term demand across our markets 80% +2Bn OF POWER GENERATION URBAN POPULATION
Slide 7: Mega Risks
x6 >55% LONGER POWER OF RENEWABLE ENERGY INTERRUPTION IN EMERGING IN EU MIX BY 2030 MARKETS VS. MATURE Mega Risks amplifying Mega Trends impact 15% 12x OF UNMET ALUMINIUM LONGER OUTAGE & COPPER DEMAND DURATION INDUCED EXPECTED IN 2030 BY WEATHER EVENTS INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR
Slide 8: Strategic shifts
+60% INCREASE IN AVERAGE YEARLY CAPEX BY UTILITIES IN EUROPE (2020–2030) ~10% 90% OF GLOBAL REDUCTION IN ELECTRICITY TO BE SUPPLIERS BASE BY CONSUMED BY USAGE CUSTOMERS DATA CENTERS BY 2030 ACROSS REGIONS Strategic shifts to address x2 60% EXPECTED MARKET OF INTERCONNECTOR GROWTH OF FIRE-SAFE LV CAB
Slide 9: Prosperity reborn
2018 Prosperity reborn 2024 INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 9
Slide 10: Delivering solid value creation
2018 2024 Delivering solid value creation INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 10
Slide 11: Unlocking Profitability
2018 2024 Unlocking Profitability ADJUSTED EBITDA (€M) RETURN ON CAPITAL EMPLOYED 325 2018 x2.5 9% 2018 >20%2024 GUIDANCE 750-800 2024 CMD GUIDANCE INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 11
Slide 12: Unprecedented backlog & CAPEX
2018 2024 Unprecedented backlog & CAPEX invested in high voltage €6.2Bn X4 PWR-TRANSMISSION ADJUSTED BACKLOG GROWTH €1.4Bn DEC 2018 SEPT 2024 INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 12
Slide 13: Massive complexity & carbon footprint reduction
2018 2024 Massive complexity & carbon footprint reduction COMPLEXITY DENSITY & SCALABILITY GHG EMISSIONS Customers-projects, Productivity improvement, Scopes 1, 2 & 3 SKUs, points of delivery inventory reduction versus 2019 -40% +40% -36% INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNO
Slide 14: A +20% new product vitality index
2018 2024 ● Mobiway BOOST A +20% new product vitality index ● Solar offer ● Infracheck augmented reality ● MV accessories installation App ● CableLoop ● Superconductor installation in France ● Mobiway Speed X3 ● 1KV Easy ● Mobiway MOB ● MV powerboost ● Mobiway MV INNOVATION ● Mobiway POP LAUNCHED ●
Slide 15: A unique in-house value creation system
2018 2024 A unique in-house value creation system Nexans Business System (SHIFT) is our value creation system supporting all stakeholder global impact. It generated around €300M of EBITDA expansion between 2018 and 2024, significative working capital reduction, 20% productivity improvement and carbo
Slide 16: Profitable growth
Scaling new heights Profitable growth INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 16
Slide 17: Three chapters to build the Global Electrification Pure Player
Three chapters to build the Global Electrification Pure Player RESTRUCTURE SIMPLIFY AMPLIFY Nexans performance towards Electrification Electrification profitable VALUE CREATION model growth momentum 2019-2021 2021-2024 2024-2028 INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FIN
Slide 18: Accelerating our path to Electrification
Accelerating our path to Electrification Nexans new strategic roadmap: OUTSIZED PROFITABLE GROWTH RUNWAY NEW TECH SOLUTIONS NEW MARKET SEGMENTS OFFERS AMPLIFIED BY ARTIFICIAL INTELLIGENCE INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 18
Slide 19: Main markets patterns are accelerating
Main markets patterns are accelerating HIGH PWR-TRANSMISSION PWR-GRID PWR-CONNECT MEDIUM LOW ACCELERATION SUPPLY Hypercycle of demand saturating SHORTAGE equipment capacity DEMAND Clients requiring different offers for each VERTICALIZATION specific market segment ACCELERATION IN TECHNOLOGICAL PWR-GR
Slide 20: After the Age of Fossil the world is shifting to the Age of Electricity
After the Age of Fossil the world is shifting to the Age of Electricity Between 2023 and 2035, … more Electricity means more …amplified by new Electricity demand will grow 6x... Cables & Accessories... ELECTRICITY DEMAND VS TOTAL ENERGY DEMAND CABLE MARKET VALUE POOLS +7% p.a. 6x +5% ~€160Bn p.a. ~€
Slide 21: We are expanding the market playfield
We are expanding the market playfield NEXANS ACCESSORIES TECH SOLUTIONS, CORE MARKET AND SERVICES DIGITAL AND AI ~€120Bn x2 x4 INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 21
Slide 22: PWR-Transmission PWR-Grid PWR-Connect
PWR-TRANSMISSION PWR-GRID PWR-CONNECT INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 22
Slide 23: Key pillars for a winning strategy
Key pillars for a winning strategy WE HAVE THE BEST WE HAVE THE RIGHT WE HAVE THE RIGHT POSITIONING ASSETS SOLUTIONS 3 GROWING MARKETS EARLY BIRD INVESTMENTS END-TO-END SOLUTIONS 2x above global GDP growth in manufacturing capacity in bundling cables with the right geographies accessories & supply s
Slide 24: PWR-Transmission
0.2 PWR-Transmission Pascal Radue Guillaume Eymery Executive Vice President PWR-Transmission Chief PWR-Transmission Transformation Officer INTRODUCTION PWR-TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 24
Slide 25: We drive the Energy Transition
+50% +72,000 km INCREASE IN ANNUAL OF INTERCONNECTORS TO OFFSHORE WIND CAPACITY BE INSTALLED We drive the INSTALLED BETWEEN 2022 AND 2023 (2020-2030) Energy Transition €26Bn CABLES & SYSTEMS MARKET IN 2028 by connecting power generation areas with consumption areas 60% OF INTERCONNECTOR COST IS NON-
Slide 26: Growing challenges
~24% 4 GW OF THE WESTERN AMOUNT OF POWER DEMAND FOR SUBSEA TRANSFERRED TO THE CABLES CANNOT BE MET SHORE FROM LANWIN4 AND IN 2030 DUE TO LIMITED BALWIN3 OFFSHORE CAPACITIES WIND FARMS Growing challenges ~ 10% 2x OF THE CAPEX OF AN OFFSHORE WIND FARM OFFSHORE WIND FARM IS PROJECT SIZE BETWEEN ALLOCAT
Slide 27: Meeting the demand with tech-driven execution
Meeting the demand with tech-driven execution MARKET CHALLENGES FROM PRODUCT TO SOLUTIONS NEXANS FOCUS AREAS INCREASING PROJECT SIZE AND COMPLEXITY MOVE TOWARD FULL TURNKEY PROJECTS TECHNOLOGICAL SHIFT HIGHER POWER THROUGHPUT IN ONE CABLE PARTNER WITH LEVERAGE EARLY EXECUTE HIGH DEEPER & LONGER CABL
Slide 28: Driving growth with strategic capex
Driving growth €560M strategic capex invested to address demand ~€560M 2020 2024 Strategic Capex invested between 2021 and 2024E SUBSEA 4 lines 8 lines LINES FOOTPRINT ~90% of adjusted backlog booked Skagerrak with TSOs CABLE-LAYING Aurora VESSELS Skagerrak Electra* *ready spring 2026 ~80% ADJUSTED
Slide 29: We are ready to build the future with our cutting-edge assets
We are ready to build the future with our cutting-edge assets 70 PATENTS BEYOND 2026 with New Halden Plant and Electra Vessel technologies Halden plant Halden plant expansion Further investment to be considered depending on financing and frame- agreement support 1.3x Electra vessel can handle 13,500
Slide 30: The future is floating offshore wind technology
The future is floating offshore wind technology we are positioned to lead the way NEXANS TECHNOLOGY WORLD’S FIRST 14% floating offshore of the offshore wind wind farm delivered market will be floating by 2032 €30M INVESTMENTS ~5x IN DYNAMIC HV CABLES to create advanced dynamic higher growth rate tha
Slide 31: Three programs to maximize value
Three programs to maximize value Harvest the benefits of project selectivity while fostering execution excellence EBITDA % Project Selecting projects with an optimal risk/return selectivity balance. Reinforce an execution culture driven by the Execution rigorous application of Quality, On-time deliv
Slide 32: AI Powered asset optimization
AI Powered asset optimization Real-time scenario planning in a dynamic environment to optimize asset utilization and decision-making while boosting performance In partnership with INTRODUCTION PWR-TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 32
Slide 33: PWR-Grid
0.3 PWR-Grid Vijay Mahadevan Elyette Roux Executive Vice-President Vice-President PWR-Grid PWR-Grid & PWR-Connect AMEA Power Accessories INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 33
Slide 34: Acceleration of the grid obsolescence
+40 6x LONGER OUTAGE YEARS OLD AVERAGE DURATION INDUCED BY US AND EU GRIDS WEATHER EVENTS Acceleration of the grid obsolescence +80% INCREASE IN EUROPEAN COUNTRIES REPORTING ELECTRICIANS SHORTAGE Modernization is urgently needed to face tomorrow’s challenges 15% 80% OF UNMET ALUMINIUM OF POWER GENER
Slide 35: The Power grid urgent modernization will drive significant demand
The Power grid urgent modernization will drive significant demand 3 GROWTH SEGMENTS TOTAL SPEND FOR GRID CABLES GLOBALLY (€Bn) DSO IN MATURE +7% 2x MARKETS DSO IN EMERGING MARKETS p.a. 23-28 CAPEX from 3 major RENEWABLES €37Bn CAGR European DSOs 2x €26Bn 18 +6% investments in EV, data centers, gigaf
Slide 36: We are addressing market challenges with differentiated tech solutions
We are addressing market challenges with differentiated tech solutions MARKET CHALLENGES SUPPLY & SKILLS RAPID GRID BUILD OUT NEXANS SOLUTIONS ELECTRICIANS AND EXPERTISE SHORTAGE PRODUCT TO SOLUTIONS TECHNOLOGY ADVANCEMENTS & TOTAL COSTS OPTIMISATION LEVERAGE OFFER END-TO-END DOUBLE ON EXTENDING SOL
Slide 37: We tailor solutions for each critical market
We tailor solutions for each critical market to tackle power grid complexity FROM COMMODITY PLAY: TO SPECIALTY PLAYS: DISTRIBUTION PWR-GRID DISTRIBUTION DSO IN DSO IN RENEWABLES MATURE EMERGING MARKETS MARKETS Standard products Volume and costs Tech solutions driven approach Tailored approach Differ
Slide 38: Nexans Value Creation equation
Nexans Value Creation equation to structurally increase business performance HIGH SPECIALTY PLAY HIGH PERFORMANCE (BU) CUSTOMER EXPERIENCE DOUBLE DIGIT MARGIN LIFECYCLE INCREASE SOLUTIONS LOW SPECIALTY PLAY TECHNOLOGY & DIGITAL STACK LOW PERFORMANCE (BU) VALUE CREATION PLAN IMPLEMENTATION INTRODUCTI
Slide 39: We revolutionize the grid with advanced offers
We revolutionize the grid with Customer Experience, Lifecycle solutions and Technology stack TECHNOLOGY & DIGITAL STACK Smart accessories: 40% LIFECYCLE SOLUTIONS smart connectors, smart REVENUE WILL adapters, smart cable guard SHIFT TO ADVANCED ADVANCED OFFERS Low carbon cable OFFERS BY 2028 CUSTOM
Slide 40: Digital & AI services to anticipate and minimize grid risks
Digital & AI services to anticipate and minimize grid risks NEXANS GRID RESILIENCY SOLUTIONS BOTTLENECKS MANAGEMENT DECREASED OUTAGES & RISKS REDUCED INVESTMENTS RISK PROFILE INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 40
Slide 41: PWR-Connect
0.4 PWR-Connect Julien Hueber Jérôme Fournier Executive Vice-President Corporate Vice-President, PWR-Grid & PWR-Connect Innovation, Services & Growth Europe and Asia Pacific INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 41
Slide 42: Mega Risks
EVERY 30s ~18% AN ELECTRICAL FIRE UNMET DEMAND OF BREAKS OUT SOMEWHERE COPPER IN 2030 IN THE WORLD Mega Risks amplifying Mega Trends impact x2 +20% SHARE OF EUROPEAN AVERAGE YEARLY COUNTRIES REPORTING INSURED LOSSES DUE TO ELECTRICIAN SHORTAGES NATURAL CATASTROPHES Sources: UNCTAD Handbook of Statis
Slide 43: Market shifts
~10% 30-50% OF GLOBAL ELECTRICITY OF DIGITAL SALES CONSUMED BY DATA OVER 5 YEARS CENTERS BY 2030 Market shifts to address x2 +5% EXPECTED MARKET MARGINS ON SOLUTIONS GROWTH OF FIRE-SAFE THROUGH EFFICIENCY CABLES VS. PVC CABLES GAINS FOR CUSTOMERS INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONN
Slide 44: We are addressing market challenges with pioneering solutions
We are addressing market challenges with pioneering solutions MARKET CHALLENGES PRODUCT TO SOLUTIONS ELECTRICIAN SHORTAGE NEXANS SOLUTIONS LOW INSTALLATION PRODUCTIVITY TECHNOLOGICAL SHIFT NEW REGULATIONS PUSHING FOR FIRE SAFETY SCALE DIGITAL TO ENHANCE LOW CARBON EMISSION REQUIRED IN BUILDINGS DIFF
Slide 45: We elevate market standards & solutions
We elevate market standards & solutions for infrastructures’ resilience and robustness FROM COMMODITY PLAY TO SPECIALTY PLAYS USAGE PWR-CONNECT Residential Infrastructure Critical Specialized buildings projects “One-size-fits-all" approach Selectivity of verticals Identical range of cable products w
Slide 46: Three distinct segments with diverse growth paths
4 distinct segments with diverse growth paths 2 increased segments focus DIFFERENTIATED PATTERNS SPECIALIZED PROJECTS OF GROWTH CRITICAL BUILDINGS +5% 23-28E INFRASTRUCTURE RESIDENTIAL x3 p.a. CAGR INCREASE OF GLOBAL ELECTRICITY DEMAND IN 2050 €94Bn +16% 7 INCREASED FOCUS OVER €74Bn 2024-28 +2Bn 3 2
Slide 47: Data center
TECH OFFERING Data center INCREASED DEMAND IN PRODUCTION AND INSTALLATION OF ELECTRICAL & MECHANICAL COMPONENTS ~2% ELECTRICAL CABLES ~10% Electricity demand is set to (cables, transformers, switches, and UPS OF TOTAL OF ELECTRICAL CAPEX CAPEX batteries, cooling systems, etc) double Global data cent
Slide 48: Data center tech offering
TECH OFFERING Data center SCALE OUR VALUE PROPOSITION FOR AI GROWTH IN DATA CENTERS Energy and full components offering ADVANCED CABLE OFFERING CUSTOMIZED FIRE-RESISTANT, FLEXIBLE AND ERGONOMIC CABLES PRE-CUT, PRE-STRIPPED CABLES FOR EASIER INSTALLATION LOW CARBON CABLE OFFER SERVICES AROUND THE CAB
Slide 49: Introduction
INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 49
Slide 50: We revolutionize and amplify our offers
We revolutionize and amplify our offers TECHNOLOGY & DIGITAL STACK >30% REVENUE WILL New tech products: SHIFT TO ADVANCED LIFECYCLE SOLUTIONS Fire retardant, resistant OFFERS BY 2028 ADVANCED OFFERS Low carbon offer Omnichannel: CUSTOMER EXPERIENCE digital sell out Local for local model LVDC archite
Slide 51: Nexans Value creation equation
Nexans Value creation equation Sustained performance with reduced exposure to cycles HIGH HIGH REPEATABLE CYCLICITY OFFERS PERFORMANCE (BU) +€50M invested in Fire safety tech products 24 innovation launches / year x2 Digital sales growth DOUBLE CUSTOMER DIGIT EXPERIENCE EBITDA MARGIN LIFECYCLE SOLUT
Slide 52: Our innovation & transformation capabilities
0.5 Our innovation & transformation capabilities Christopher Guérin CEO INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 52
Slide 53: We revolutionize innovation from Basic offer to Advanced
We revolutionize innovation from Basic offer to Advanced Customer journey, Lifecycle solutions, and Technology stack powered by Software and IoT TECHNOLOGY STACK ~40% IoT / Software / AI OF REVENUE MONITOR GENERATED BY LIFECYCLE SOLUTIONS Smart cables ADVANCED OFFERS Smart connectors ADVANCED OFFERS
Slide 54: We are partnering with industry leaders in an ecosystem approach
We are partnering with industry leaders ® in an ecosystem approach GEN AI AMPLIFIED SOLUTIONS AND TRANSFORMATION MODEL FOR NEW VALUE CREATION POOL ® ® COPPER INDUSTRY RECYCLING 4.0 DIGITALISATION OF ASSETS TODAY’S SCRAP WILL FUEL TOMORROW’S GROWTH COMPETITIVENESS SAFETY UPSKILLING REAL-TIME DECISION
Slide 55: Achieving new heights in competitiveness through digitalization
In partnership with Achieving new heights in ® competitiveness through digitalization AUTOMATION DIGITALIZATION AI-ENABLED OPERATIONS 30 SITES DEPLOYED IN 2024 SMART OPERATIONS 45 ASSET OPTIMIZATION DIGITALIZATION OF AI-BASED VIDEO ANALYSIS SITES DEPLOYED IN 2028 ENHANCED BY AUTOMATION INDUSTRIAL PR
Slide 56: Our SHIFT value creation system amplified by AI
Our SHIFT value creation system amplified by AI In partnership with ® INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 56
Slide 57: Data engine
AI-powered system that predicts, automates calculations, and generates recommendations to implement SHIFT most impactful levers across Nexans in real time DATA ENGINE COSTING COMPLEXITY DYNAMIC PRICING CLIENT SEGMENTATION In partnership with ® INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT
Slide 58: Partnership with Continuus Properzi
In partnership with From times of abundance to times of scarcity ® Partnership with Continuus Properzi COPPER SUPPLY AND DEMAND (MILLION TONS) Supply Demand 2030 40 33MT 27MT 2025 ZOOM ON RECYCLING OFFERS 28MT 2021 - 2035 SOLUTIONS TO 30 27MT ADDRESS COPPER SCARCITY AND SHORTAGE CREATE NEW 20 PERIOD
Slide 59: We champion circular economy
We champion circular economy to sustain recycled copper demand, GHG emission reduction and biodiversity protection ~18% A KEY ROLE IN THE of global copper EXPAND CIRCULAR ECONOMY demand will be unmet RECYCLING Increase waste collection to by 2030 CAPACITIES strengthen our circular model Investment i
Slide 60: Elevating financial performance
0.6 Elevating financial performance Jean-Christophe Juillard Deputy CEO & CFO INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 60
Slide 61: Group financial performance
Since 2021, we have deeply and structurally improved the Group financial performance REPORTED ADJ. EBITDA (€M) NORMALIZED FREE CASH FLOW (€M) STANDARD SALES (€M) ROCE (%)(2) AND MARGIN (%)(1) AND NCCR (%) 11% 50% 6,736 Margin NCCR 6,054 8% 723 49% 362 20% LTM Jun-24 Margin NCCR 463 227 16% 2021 22%
Slide 62: On track to meet or exceed 2021-2024E Financial Commitments
We are on track to meet or exceed our 2021-2024E Financial Commitments 2024 COMMITTED (CMD 2021) LTM JUN-24* STANDARD SALES €6-7Bn €6.7Bn GROUP EBITDA MARGIN 10-12% 11% STANDARD SALES €3.5-3.7Bn €4.1Bn ELECTRIFICATION EBITDA MARGIN 11-13% 13% ROCE >20% 22% *Jun 2024 Last Twelve Month defined as H1 2
Slide 63: We exceeded our normalized cash generation commitment
We exceeded our normalized cash generation commitment while strategically investing in PWR-Transmission expansion NORMALIZED FREE CASH FLOW, €BN 2021-2024E CAPITAL ALLOCATION ~€1.4Bn Strategic CAPEX in +~€150M M&A excess cash PWR-Transmission generation/year ‒ Acquisitions of ~40% ‒ Halden factory e
Slide 64: Non-Electrification businesses are performing
Non-Electrification businesses are performing and proceeds will fuel our investments in Electrification STANDARD SALES (€BN) & EBITDA MARGIN (%)(1) 11% Margin €1.7Bn 9% Margin Non-Electrification We have significantly Proceeds from €1.4Bn is not part of our improved our divestments core business Non
Slide 65: Emerging as a Pure Electrification champion
We commit to a disciplined path, emerging as a Pure Electrification champion ACQUISITIONS €1.3Bn sales(1) Average EV/EBITDA(2) 6.4x pre-synergies CENTELSA REKA CABLES LA TRIVENETA CAVI 4.8x post-synergies 2020 2021 2022 2023 2024 BERK-TEK (TELECOM) TELECOM SYSTEMS DIVESTMENTS AMERCABLE LYNXEO AUTO E
Slide 66: €50M total synergies supported by a proven M&A blueprint
€50M total synergies supported by a proven M&A blueprint NEXANS M&A BLUEPRINT INTEGRATION (UPDATED TOTAL SYNERGIES, €M) 20 SHIFT 16 TRANSFORMATION Base Case Revised Case 12 COMPLEXITY 10 REDUCTION 8 INDUSTRIAL FOOTPRINT +60% +50% OPTIMIZATION ABOVE INITIAL ABOVE INITIAL TARGET TARGET SMOOTH 2024 202
Slide 67: Nexans ambition
Nexans ambition INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 67
Slide 68: We will unleash our potential with selective and profitable growth
We will unleash our potential with selective and profitable growth in Electrification businesses PWR-TRANSMISSION PWR-GRID PWR-CONNECT €870M €1,186M €1,679M 2023 Standard sales 2023 Standard sales 2023 Standard sales KEY FOCUS AREAS KEY FOCUS AREAS KEY FOCUS AREAS Leverage early Capitalize on extend
Slide 69: We keep reshaping our portfolio, driving profitable growth
We keep reshaping our portfolio, driving profitable growth, and leveraging on a more premium mix +€350M (+/- €50M) INCREMENTAL EBITDA IN ELECTRIFICATION Volume growth Closed M&A full contribution Mix premium Volume growth Transformation Mix premium Growth / Capacities 2024E PWR-Transmission PWR-Grid
Slide 70: Group adjusted EBITDA target above €1.1Bn by 2028
Group adjusted EBITDA target 1,150 +/-75 above €1.1Bn by 2028 750-800 665 599 463 413 347 325 2018 2019 2020 2021 2022 2023 2024 2028E Guidance GROUP REPORTED ADJUSTED EBITDA, €M INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 70
Slide 71: 2028E adjusted EBITDA path regardless of portfolio mix
2028E adjusted EBITDA path regardless of portfolio mix We will complete rotation of our portfolio towards 100% Electrification Electrification & Other Non-Electrification €20Bn M&A PIPELINE ~€1,150M +/- €75m ~€750-800M Non-core EBITDA expansion EBITDA divested depending on acquisition targets €20Bn
Slide 72: Return on Capital Employed continues to step-up through 2028
Return on Capital Employed continues to step-up through 2028 2028 AMBITION Group ROCE 21% 21% 20% >20% Group Return on Capital Employed(1) 16% Profitability expansion Strict working capital management 11% Disciplined investment 10% (1) Excluding goodwill arising from future acquisitions. 2019 2020 2
Slide 73: Maintaining Growth Capex
Maintaining Growth Capex while shifting resources toward PWR-Grid and PWR-Connect CAPEX BY NATURE MAJOR GROWTH CAPEX ~€1.3Bn ~€1.2Bn PWR-TRANSMISSION PWR-GRID PWR-CONNECT ~30% Maintenance ~30% CAPEX ~70% ~70% Growth CAPEX NEXANS ELECTRA MV GREENFIELD RECYCLING CAPACITY CLV IN MOROCCO EXPANSION ~€150
Slide 74: Boosting free cash flow generation
Boosting free cash flow generation >45% Through EBITDA expansion and Conversion CAPEX normalization rate(1) ~25% Conversion ~€1.4Bn rate(1) CUMULATED FREE CASH FLOW OVER 2025-2028 2024E 2028E (1) Conversion rate, calculated as FCF before M&A and equity operations/ Adj. EBITDA and assuming flat WC ch
Slide 75: Capital allocation priorities
Capital allocation priorities M&A SHAREHOLDER + potential add’l growth capex LEVERAGE RETURN Reinforcing our portfolio Committing to strong credit Committing to a progressive positioning in rating and dividend policy with a Net Debt/Adj.EBITDA ≤1.0x. dividend payout ratio ≥30%. Electrification marke
Slide 76: A free cash flow allocation aligned with our growth ambition
A free cash flow allocation aligned with our growth ambition while increasing shareholders return and keeping a disciplined leverage ~ €1.4Bn Cumulated free €2BN FIRE POWER FOR M&A cash flow ‒ Cash generation allocated to M&A GROWTHGROWTH OR DE-LEVERAGE ‒ Additional leverage capacity while remaining
Slide 77: 2028 Guidance
2028 Guidance GROUP ELECTRIFICATION ORGANIC SALES ADJUSTED EBITDA €1,150M 2024-2028 CAGR 3-5% (+/- €75M) FCF CONVERSION(1) >45% INCREMENTAL ADJ. EBITDA +€350M (+/- €50M) ROCE >20% DIVIDEND PAYOUT(2) 30% LEVERAGE ≤1.0x (1) FCF pre-M&A and equity operations / Adj. EBITDA assuming flat change in WC. (
Slide 78: Conclusion
Conclusion Christopher Guérin CEO INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 78
Slide 79: Fueling our next phase of profitable growth
Fueling our next phase of profitable growth PWR-TRANSMISSION PWR-GRID PWR-CONNECT LEVERAGE EARLY LEVERAGE OUR EXTENDING ENHANCE COMMERCIAL INVESTMENTS IN CAPACITY CAPACITIES & CAPABILITIES RECOGNITION EXECUTE HIGH-QUALITY OUTGROW ON CRITICAL BACKLOG TO 2028 OFFER END-TO-END BUILDINGS AND SOLUTION SP
Slide 80: Sustainability is our compass
Sustainability is our compass WE TURN CLIMATE COMMITMENTS INTO REAL … SUPPORTED BY A TRENDSETTER OPERATING MODEL PROGRESS BY SPARKING ACTION NOW... -29% Carbon emissions reduction (in %) -30% APPROVED -42% -46% 2019 2028 2030 2050 INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION F
Slide 81: Q&A
Q&A INTRODUCTION PWR - TRANSMISSION PWR - GRID PWR - CONNECT INNOVATION FINANCE CONCLUSION 81
Slide 82: Our ESG Roadmap
Our ESG Roadmap A compass supporting our long-term strategy ENVIRONMENT ENGAGEMENT ECOSYSTEMS 2023 2028 2023 2028 2023 2028 DECARBONIZE OUR VALUE CHAIN ENSURE A SAFE WORKPLACE RUN ETHICAL BUSINESS PRACTICES Reducction of GHG Total recordable incident Completion rate of emissions Scope 1&2 37% 42% ra
Slide 83: Glossary
Glossary Adjusted EBITDA: Starting 2023, Nexans Recurring net income: Recurring net income ROCE (Return on Capital Employed): ROCE is consolidated adjusted EBITDA is defined as operating corresponds to the sum of the operating margin, the defined as 12 months Operating Margin, including margin befor
Slide 84: Sparking Electrification with Tech solutions
CAPITAL MARKETS DAY 2024 Sparking Electrification with Tech solutions