Nexans Sa · EURONEXT:NEX
Nexans Sa — H1 2017 Earnings Presentation
40 slides from Nexans Sa's earnings presentation, Jul 27, 2017
Slide 1: 2017 Half Year Results
2017 Half Year Results July 27, 2017
Slide 2: Safe Harbor
Safe Harbor 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 also invited to log onto the Group's website to read the full text of the
Slide 3: Key Take-aways
Key Take-aways ● Sales of 3,206 M€ - reflecting a +2.4% organic growth (+4.6% excluding Oil & Gas) Organic growth driven by ● Growth fueled by a strong Project activity – notably in Submarine High Voltage Project activities ● Difficult market environment in SAM - expected to improve in H2 ● Operatin
Slide 4: Agenda
Agenda 1 Half Year 2017 highlights 2 Business review 3 Key Financials 4 Outlook 5 Appendix
Slide 5: First half 2017 Highlights
1 First half 2017 Highlights Arnaud POUPART-LAFARGE, CEO
Slide 6: Nexans, a global cable solution provider
HIGHLIGHTS 1 Nexans, a global cable solution provider Well positioned on its four end-markets Sales by business segments End markets Energy and data ● Power transmission infrastructures ● Power/data distribution 13% ● Accessories ● Mining 37% Transmission, Energy resources ● O&G Distribution ● Renew
Slide 7: Nexans brings Energy to Life: TenneT HVDC contract
HIGHLIGHTS 1 Nexans brings Energy to Life Energy transition Bringing Germany closer to its ‘100% renewable energy by 2050’ plan TenneT awards Nexans a €100 million-worth contract for the supply of HVDC interconnection for offshore wind farms in the North Sea. The Nexans contract includes two 90-km-l
Slide 8: Nexans brings Energy to Life: Roan Wind Farm
HIGHLIGHTS 1 Nexans brings Energy to Life Energy transition Carrying green energy to thousands of Norwegian households Linka AS, the electrotechnical contractor for the project, has chosen Nexans to supply cables for Roan Wind Farm, the largest onshore wind project in Europe. Nexans will supply 200
Slide 9: Nexans brings Energy to Life: NVC acquisition
HIGHLIGHTS 1 Nexans brings Energy to Life Energy transition Addressing the growing submarine energy market Nippon High Voltage Cable Corporation (NVC) becomes a 100% Nexans company. Created in 2006 with the objective to support the development of the Group’s sales by adding capacity in Oil Filled an
Slide 10: Nexans brings Energy to Life: BP framework agreement
HIGHLIGHTS 1 Nexans brings Energy to Life Energy resources Securing a leading position in the subsea market Nexans signed five-year Global Framework Agreement with BP covering the engineering, procurement and construction of umbilical and Direct Electrical Heating (DEH) systems and ancillary equipme
Slide 11: Nexans brings Energy to Life: Data Center Solutions
HIGHLIGHTS 1 Nexans brings Energy to Life Exponential growth of data flow Driving the hyper-connected world of tomorrow Nexans launches Nexans Data Center Solutions to help global hyperscale data centers operators keep up with the exponential data growth. The new Business Unit will provide hyperscal
Slide 12: Nexans brings Energy to Life: G2mobility partnership
HIGHLIGHTS 1 Nexans brings Energy to Life Energy transition Driving eco-mobility through strategic partnerships Nexans increases its stake in G2mobility, a startup specialized in smart charging systems and solutions for electric vehicles. This emblematic "start-up - large group" partnership combinin
Slide 13: Nexans brings Energy to Life: Liban Cables solar
HIGHLIGHTS 1 Nexans brings Energy to Life Energy transition / CSR Contributing to greener environment through efficient CSR policy Nexans inaugurated a new 600 kW-peak solar power system at its Liban Cables facility. By replacing one of its 6 electric generators with photovoltaic panels, Liban Cable
Slide 14: Nexans brings Energy to Life: IoT drum tracking
HIGHLIGHTS 1 Nexans brings Energy to Life Innovation Bringing more value to customers with IoT Nexans and ffly4u, the industrial Internet of Things (IoT) specialist, are pioneering a tracking and management service that lets DSO customers know the exact location of their drums and indicates how much
Slide 15: Nexans brings Energy to Life: FLAMEX train cables
HIGHLIGHTS 1 Nexans brings Energy to Life Innovation Boosting train fire safety Nexans launches FLAMEX® SI-FR line of fire-resistant cable products for critical power and control systems used in trains. FLAMEX® SI-FR cables are particularly suitable for high temperatures and when required to save we
Slide 16: Nexans brings Energy to Life: HVDC superconductor cables
HIGHLIGHTS 1 Nexans brings Energy to Life Innovation Relieving Europe’s congested power networks As part of the EU-funded ‘Best Paths’ project, Nexans is contributing to the creation of a new generation of high voltage direct current (HVDC) superconductor cables. With nearly 40 leading organisations
Slide 17: Business Review
2 Business Review Arnaud POUPART-LAFARGE, CEO
Slide 18: Half Year 2017 key figures
BUSINESS REVIEW 2 Half Year 2017 key figures Nexans on its way to achieve its transformation plan +2.4% organic growth Operating margin +3.2% Sales at constant metal prices in M€ w/o O&G Operating margin in M€ +2.4% Impact +4.6% 135 M€ 140 M€ 2,336 M€ 107 M€ 2,277 M€ June’ 16 FX Organic growth Scope
Slide 19: Sales by geographies
BUSINESS REVIEW 2 Sales by geographies A contrasted business environment % of Standard Sales H1 2017 Organic Growth of which O&G Impact SAM 6% SAM -16.8% MERA 6% MERA 0.2% APAC 11% APAC -7.0% -9.2% NAM 13% NAM -4.4% +0.2% Europe 31% Europe -2.5% High Voltage 23% High Voltage 29.5% -3.8% Harnesses 10
Slide 20: Distributors & Installers
BUSINESS REVIEW 2 Distributors & Installers A slow recovery after a tough H2’16 Sales at constant metal: 572 M€ Business Update Organic growth Organic growth +3.9% -2.8% -3.2% % of Sales at constant metal 10.5% Sales 580 547 572 -1.8% -8.7% -5.9% -8.3% Europe NAM APAC MERA SAM H1’ 16 H2’ 16 H1’ 17 B
Slide 21: Industry
BUSINESS REVIEW 2 Industry Steady margin versus H2’16 despite heavy O&G impact Sales at constant metal: 587 M€ Business Update Organic growth Organic growth -3.8% -3.7% -0.7% % of Sales at constant metal TRANSPORT RESOURCES OTHERS 10% 3% 22% 8% 9% 8% 6% -1% Sales 602 569 587 -45% Automotive Shipbuil
Slide 22: Transmission Distribution & Operators
BUSINESS REVIEW 2 Transmission Distribution & Operators A dynamic business with contrasted market segments Sales at constant metal: 1,027 M€ Market Drivers Organic growth -0,7% -3.3% +8.7% WIND POWER GLOBAL DATA CENTER TRAFFIC GROWTH Sales 945 897 1,027 497 GW H1’ 16 H2’ 16 H1’ 17 Operating Margin :
Slide 23: TD&O / Transmission
BUSINESS REVIEW 2 TD&O / Transmission An intensive Submarine High Voltage activity Organic Growth : +32.7% Sub-sea Organic growth 62% -3% 16% ● Robust activity in Submarine High Voltage correlated to optimal execution of major projects drives higher margins ● Hybrid Cables include lower demand for U
Slide 24: TD&O / Utilities and Operators
BUSINESS REVIEW 2 TD&O / Utilities and Operators Firm growth in Operators but a struggling Utilities business Organic growth : -6.3% Business Update Organic growth Organic growth +3.2% -6.9% -6.3% 20.8% % of Sales at constant metal 10.6% -9.6% -15.5% Sales -24.1% Europe NAM APAC MERA SAM UTILITIES:
Slide 25: Strategic initiatives offsetting the volume & price pressure effects
BUSINESS REVIEW 2 Strategic initiatives offsetting the volume & price pressure effects Operating margin evolution in M€ 43 (44) 135 6 140 STRATEGIC PRICE COST Operating INITIATIVES SQUEEZE reserves & others June’ 2016 June’ 2017 25 I 2017 Half Year Results
Slide 26: Ongoing contributions of strategic initiatives
BUSINESS REVIEW 2 Ongoing contributions of strategic initiatives 2013 European plan Fixed Cost ● +15 M€ before inflation in addition to the 84 M€ already delivered 2015 European plan Reduction ● Combination of enhanced productivity in submarine high voltage 15 M€ and lower fixed costs in Europe OPEX
Slide 27: Key financials
3 Key financials Nicolas BADRÉ, CFO
Slide 28: Income Statement (1/2)
KEY FINANCIALS 3 Income Statement (1/2) Key figures Gross Margin evolution In M€ June 2016 June 2017 32.9% 12 32 (32) 32.3% FX Scope VCR ML Price Op. Reserves Sales at actual metal prices 2,951 3,206 Pressure & others Sales at constant metal prices 2,277 2,336 June’ 2016 June’ 2017 Margin on variabl
Slide 29: Income Statement (2/2)
KEY FINANCIALS 3 Income Statement (2/2) Key figures From Operating Margin to Operating Income In M€ June 2016 June 2017 In M€ June’16 June’17 Core exposure Impact (25) 40 Operating margin 135 140 Restructuring (13) (20) Net asset Impairment - (1) Restructuring (13) (20) Provision for Anti-trust inve
Slide 30: Focus on cash management
KEY FINANCIALS 3 Focus on cash management Net Debt last 12 month evolution in M€ Net Debt last 6 month evolution in M€ (19) 16 423 41 12 423 33 52 18 373 (257) Equity 201 FX operations FX Equity 80 Non & Other Non operations & Other Operating Operating Operating WC WC 141 Working Restructuring Capit
Slide 31: Balance Sheet strength
KEY FINANCIALS 3 Balance Sheet strength Balance Sheet Interest Charge over EBITDA Dec’ June Interest/ 24% In M€ 17% 16% EBITDA 2016 2017 15% Long term fixed assets 1,661 1,602 Interest charge Of which goodwill 254 242 Deferred tax assets 180 174 Dec’ 15 June’16 Dec’ 16 June’17 Non-current Assets 1,8
Slide 32: Strong liquidity covering future debt refinancing needs
KEY FINANCIALS 3 Strong liquidity covering future debt refinancing needs Net Debt breakdown Debt redemption In M€ In M€ June 2017 1,123 Long-term ordinary Bonds 447 Undrawn Other long-term borrowings 4 facility 600 200 committed up Short-term convertible Bonds 267 to 2020 Short-term borrowings and s
Slide 33: Outlook
4 Outlook Arnaud Poupart-Lafarge, CEO
Slide 34: Priorities ahead
OUTLOOK 4 Priorities ahead – Focus on the execution of a stronger backlog for the cable activities in H2 - and accelerate the strategic initiatives – – Launch capacity increase to sustain the project business development – in particular in NAM – – Finalize and communicate the Strategic Plan 2018-202
Slide 35: US-based HV facility to become a global power cable hub
OUTLOOK 4 Nexans brings Energy to Life Energy transition US-based HV facility to become a global power cable hub Submarine Cable Leadership: As the world’s need for energy continues to grow and submarine cables are becoming increasingly Carrying important to fuel global economy, green Nexans energy
Slide 36: Appendices
Appendices BRINGS ENERGY TO LIFE
Slide 37: Sales and profitability by segment
APPENDICES Sales and profitability by segment June 2016 June 2017 In M€ Sales OM OM % Sales OM OM % Transmission, Distribution & Operators 945 63 6.7% 1,027 79 7.7% Industry 602 34 5.6% 587 33 5.7% Distributors & Installers 580 52 9.0% 572 29 5.0% Other 150 (14) n/a 149 (1) n/a TOTAL GROUP 2,277 135
Slide 38: Impact of foreign exchange and consolidation scope
APPENDICES Impact of foreign exchange and consolidation scope June Organic June Sales at constant metal prices, in M€ FX Scope 2016 growth 2017 Transmission, Distribution & Operators 945 18 82 (18) 1,027 Industry 602 7 (4) (18) 587 Distributors & Installers 580 10 (19) 2 572 Other 150 3 (4) - 149 TO
Slide 39: Sales by quarter by segment
APPENDICES Sales by quarter by segment Sequential Growth Sales at constant metal in M€ Distributors & Installers Industry 301 292 279 268 279 280 301 302 295 286 282 292 +7.4% +5.2% +4.7% +3.0% +2.2% -0.5% -0.5% -0.6% +0.4% -1.6% -6.1% -11.6% Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Q1’16 Q2’16 Q3’16 Q4’
Slide 40: Financial highlights
APPENDICES Financial highlights Sales at current metal prices (in M€) Sales at standard metal prices (in M€) Operating Margin Net income/(Loss) attributable (in M€ and as % of sales at constant metal prices) to the owners of the parent (in M€) 6,711 6,403 6,239 4,689 4,587 4,604 4,431 5.5% 91 5,814