Nexans Sa · EURONEXT:NEX
Nexans Sa — H1 2023 Earnings Presentation
38 slides from Nexans Sa's earnings presentation, Jul 26, 2023
Slide 1: 2023 First-Half Earnings
2023 FIRST-HALF EARNINGS J\lexans ELECTRIFY THE FUTURE HI] 2023 CHRISTOPHER GUERIN, CEO JEAN-CHRISTOPHE JUILLARD, DEPUTY CEO & CFO JULY 26, 2023 — PARIS
Slide 2: Safe Harbour
J\exans SAFE HARBOUR This presentation contains forwardlooking 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 d
Slide 3: Electrify the Future
J\lexans ELECTRIFY THE FUTURE HI 2023 EARNINGS:
Slide 4: H1 2023 Main Highlights
JNexans H1 2023 MAIN HIGHLIGHTS #01 #03 #04 04 DELIVERING SOLID H1 PERFORMANCE FORGING THE FUTURE OF DISTRIBUTION & USAGES YIELDING SELECTIVE GROWTH IN GENERATION & TRANSMISSION DRIVING SUSTAINABILITY » > > > Record-high EBITDA and ROCE, robust Normalized FCF generation > ] 0 7% GROUP Outstanding pe
Slide 5: Delivering Outstanding H1 2023 Performance
J\exans DELIVERING OUTSTANDING H1 2023 PERFORMANCE ALL-TIME HIGH EBITDA AND ROCE EBITDA" (€M) and : NORMALIZED FREE CASH FLOW®) EBITDA MARGIN) (%) : (€M) a ROCE“) (%) ELECTRIFICATION GROUP 21.2% 12020 H12021 H1 2022 H1 2023 JUN2020__ _JUN2021__JUN2022__ _JUN2023 JUN2020_ _JUN2021 JUN 2022 _JUN2023 (
Slide 6: Amplifying Our Impact in Electrification Markets
J\exans AMPLIFYING OUR IMPACT IN ELECTRIFICATION MARKETS CENTELSA INTEGRATION & REKA CABLES ACQUISITION COMPLETED CENTELSA : REKA CABLES - ona ; CURRENT SALES (€M) EXPECTED RECURRING SYNERGIES AFTER RAMP-UP 172 2022 REVENUE SYNERGIES — SHIFT programs deployment ~€/M — Commercial & operational synerg
Slide 7: From Innovation to Value Creation
J\exans FROM INNOVATION TO VALUE CREATION shift ACCELERATING TECHNOLOGY SHIFT TO FIRE SAFETY SYSTEMS a ‘a s\ TECHNOLOGY SHIFT +500BPS GROSS MARGIN | } A -> f \ / / 4 / yi PVC FIRE SAFETY CABLE CABLE CABLE TECHNOLOGY & Y 07 WATCHVIDEO OFFER PREMIUMIZATION FROM A TRANSACTIONAL TO A RECURRING REVENUE M
Slide 8: Generation & Transmission State-of-the-Art Assets
J\exans GENERATION & TRANSMISSION STATE-OF-THE-ART ASSETS CONSOLIDATING LEADERSHIP IN OFFSHORE WIND AND INTERCONNECTIONS HALDEN PLANT EXPANSION INVESTMENT IN A THIRD ADVANCED CABLE-LAYING VESSEL ‘Ge + Support a record project backlog and meet future needs in booming market Necans =e fy + Unique and
Slide 9: Our Path to Net Zero
J\exans OUR PATH TO NET ZERO STRENGTHENED CLIMATE COMMITMENTS SCIENCE BASED INITIATIVE (SBTi) TARGETS VS 2019 BASELINE + SCOPES1&2: - 46% by 2030 + SCOPE 3: = 30% by 2030 (vs -24% initial target) SCOPES 1, 2, 3: Net 0 by 2050 (Committed in April 23) SCIENCE BASED TARGETS ‘FING noo CORPORATE CAMA ACT
Slide 10: Electrify the Future
J\lexans ELECTRIFY THE FUTURE HI 2023 EARNINGS:
Slide 11: Pursued Focus on Performance
J\exans PURSUED FOCUS ON PERFORMANCE 10.7% GROUP EBITDA MARGIN IN H1 2023 GROUP ELECTRIFICATION BUSINESSES ECTRIFICATION BUSINESS OTHER ACTIVITIES nen METALLURGY) 0.6%" 2.5%) : +4.1% excl. Other activities 43.0% oxel. Teenie : +20.0%!") 19.2%") 3,401 3,322 1,953 1,873 ; 762 908 686 541 OTHER ACTIVIT
Slide 12: Generation & Transmission
JNexans GENERATION & TRANSMISSION DRESSING ONE-OFF PERFORMANCE 8 Sales decline on the back of the ongoing exit of Umbilical activity. s = -10%2) EBITDA impacted, as expected, by a combination of project mix and g a +14% excl. Umbilicals phasing and one-offs related to: es (i) the gradual rampup of t
Slide 13: Generation & Transmission Strong Momentum
J\exans GENERATION & TRANSMISSION STRONG MOMENTUM =" SELECTIVELY GROWING A RECORD-HIGH BACKLOG TENNET 2GW FRAME-AGREEMENT AWARD 97% SUBSEA-DRIVEN BACKLOG GENERATION & TRANSMISSION ADJUSTED BACKLOG" (€Bn) oe 488% i 6.6 +48% 5 Pi EUROASIA BY H 3.5 2.3 2.2 3 EPCI PROJECTS 2,160KM €1.7BN JUN 21 DEC 21 J
Slide 14: Electrification: Distribution
J\exans ELECTRIFICATION DISTRIBUTION SECULAR TRE AND TRANSFORMATION PLATFORM DRIVING RECORD MARGINS Secular trends, including grid modernization and renewable energy projects, driving demand for cables and accessories. EBITDA margin expansion reflecting successful SHIFT programs deployment and high
Slide 15: Electrification: Usages
J\exans ELECTRIFICATION USAGES Focus on structural performance and selectivity supporting growth in value. Europe benefitting from sustained strong pricing thanks to Prime offers and resilient volumes. Canada moderating from previously elevated levels, as expected. HI 2022 -3%'2) SALES": (EM) Hi 202
Slide 16: Non-Electrification (Industry & Solutions) Other Activities
J\exans NON-ELECTRIFICATION (INDUSTRY & SOLUTIONS) OTHER ACTIVITIES CONTINUED DOWNSIZING OF METALLURGY Mobility") and Mining benefitted from solid momentum and SHIFT Performance Metallurgy down as part of the Group's strategy to prioritize improvements. Some softening in Automation orders from last
Slide 17: Electrify the Future
J\lexans ELECTRIFY THE FUTURE 7 H1 2023 EARNINGS:
Slide 18: Organic growth EBITDA margin (%) (2)
Organic growth +5.1% -0.6% EBITDA margin (%)(2) 9.1% 10.7%
Slide 19: Amplify Electrification Businesses
J\exans AMPLIFY ELECTRIFICATION BUSINESSES STRUCTURAL OUTPERFORMANCE REINFORCING RESILIENCE EBITDA EVOLUTION (€M) - ELECTRIFICATION BUSINESSES +4% 30 3 g 3 a | 240 a —<_ _ a (41) (11) (8) JUNE 2022 Net costs. AMPLIFY SHIFT Strategic Generation & Scope Conjunctural reversal JUNE 2023, PRO FORMA") (Fi
Slide 20: Strong Cash Flow Generation from Operations
J\exans STRONG CASH FLOW GENERATION FROM OPERATIONS BEFORE M&A AND EQUITY OPERATIONS 20 NET DEBT LAST 6 MONTHS EVOLUTION (€M) (24) N een Leverage 0. A 0.3xi") FCF GENERATION (1 A8 excl. M&A (3) €171m (3) (97) NORMALIZED FCF excl. M&A (70) €281m (50) NET DEBT = Cash from Change in Reorganization CAPE
Slide 21: Solid Balance Sheet Maintained
J\exans SOLID BALANCE SHEET MAINTAINED Covenant @120% In €M DEC 22 JUN 23 Noe 21% 15% —e Gearing! Ls o Fixed assets 2,271 2,323 Other non-current assets 122 133 2 YY NON-CURRENT ASSETS. 2,393 2,A56 2 JUN 2022 DEC 2022 JUN 2023 Working capital 7 (119) é Net assets held for sale 2 61 9 Net financial d
Slide 22: High Liquidity Level
J\exans HIGH LIQUIDITY LEVEL INAUGURAL SUSTAINABILITY-LINKED BOND REINFORCES GROUP CSR COMMITMENTS NET DEBT BREAKDOWN LIQUIDITY AND DEBT REDEMPTION SCHEDULE (€M) nem DEC22.«JUN23 Lelie GROSS DEBT GROSS DEBT 1,316 1,403 ; 1,974 Cash & cash equivalents me Ce): NET DEBT 182 229 : Tae 800 a 1,403 commit
Slide 23: Electrify the Future
J\lexans ELECTRIFY THE FUTURE 23 H1 2023 EARNINGS:
Slide 24: 2023 Guidance Upgraded
J\exans 2023 GUIDANCE UPGRADED OVERALL GROUP (EXCLUDING NONCLOSED ACQUISITIONS AND DIVESTMENTS) EBITDA") NORMALIZED FREE CASH FLOW BETWEEN BETWEEN €610OMAND €650M €220MAND €300M PREVIOUSLY BETWEEN PREVIOUSLY BETWEEN €570M AND €630M €150MAND €250M 24 (1) EBITDA including sharebosed payment expenses a
Slide 25: Electrify the Future
J\lexans ELECTRIFY THE FUTURE 25 H1 2023 EARNINGS:
Slide 26: Sales at Standard Metal Prices
J\exans SALES AT STANDARD METAL PRICES IMPACT OF FOREIGN EXCHANGE AND CONSOLIDATION SCOPE he a ’ a a ELECTRIFICATION 1,906 47 1,953 (108) (45) 74 1,873 -2.5% > Generation & Transmission 434 44 478 (50) (44) - 384 10.3% > Distribution 547 3 551 (11) 23 36 599 +4.3% > Usages 924 S 924 (48) (24) 38 890
Slide 27: EBITDA by Segment
J\exans EBITDA BY SEGMENT H1 2022 PRO FORMA BRIDGE In €M H1 2022 Allocation H1 2022 published changes pro forma ELECTRIFICATION 231 9 240 > Generation & Transmission 78 VW 89 > Distribution 49 (1) 47 ~ Usages 104 - 104 NON-ELECTRIFICATION 86 (22) 65 > Industry & Solutions 65 = 65 = Telecom & Data 22
Slide 28: Sales at Standard Metal Price and Profitability
J\exans SALES AT STANDARD METAL PRICE AND PROFITABILITY BY SEGMENT H1 2022 PRO FORMA\) H1 2023 In €M Sales aoe EBITDA EBITDA% Sales aoe EBITDA) EBITDA% ELECTRIFICATION 1,953 416.5% 240 12.3% 1,873 2.5% 250 13.3% > Gann 478 425.7% 89 18.5% 384 10.3% 30 7.8% Dpenbuton 551 413.2% 47 8.6% 599 +4,3% 82 1
Slide 29: Of which: net asset impairment Of which: net gains on assets disposals
Of which: net asset impairment (13) 7 Of which: net gains on assets disposals 54 (6)
Slide 30: Free Cash Flow to Normalized Free Cash Flow
J\exans FREE CASH FLOW TO NORMALIZED FREE CASH FLOW In€mM JUN 2022 DEC 2022 JUN 2023 FREE CASH FLOW 90 271 7 Strategic Capex 84 157 88 PPE Divestment (60) (60) Normative project cash out (9) 25 22 NORMALIZED FREE CASH FLOW 104 393 281 30 H1 2023 EARNINGS:
Slide 31: of which: goodwill of which: - restructuring provisions
of which: goodwill 289 313 of which: - restructuring provisions 25 25 of which: - pension & jubilees reserves 232 220
Slide 32: Electrify the Future
J\lexans ELECTRIFY THE FUTURE 32 H1 2023 EARNINGS:
Slide 33: Nexans at a Glance
J\exans NEXANS AT A GLANCE A GLOBAL PLAYER OF THE ENERGY TRANSITION 2022 €6./BN ‘STANDARD SALES 28,000 PEOPLE 4) COUNTRIES 33 ELECTRIFICATION BUSINESSES GENERATION & TRANSMISSION DISTRIBUTION OUR PURPOSE WEELECTRIFY THE FUTURE vais DEDICATED PIONNEERS UNITED OUR PROMISE SCALE-UP TO ‘STEP-UP
Slide 34: Becoming an Electrification Pure Player
J\exans BECOMING AN ELECTRIFICATION PURE PLAYER COVERING THE VALUE CHAIN ee ©@6—® CENTRALISED TRANSMISSION DISTRIBUTION USAGES GENERATION SUBSEA AND LAND = Onshore and offshore wind = Subsea and land = Centralized grid = Residential = Industrial buildings interconnection = Rural electrification = Co
Slide 35: Generation & Transmission
J\exans GENERATION & TRANSMISSION €20*Bn PROJECT PIPELINE OFFSHORE WIND AND INTERCONNECTION PROJECTS SELECTION OF FUTURE SUBSEA OFFSHORE WIND PROJECTS SELECTION OF FUTURE SUBSEA INTERCONNECTION PROJECTS Installation date Project AC/DC Country Srey fly ee a, Capacity 2026 Seagreen 1A AC UK 500 commis
Slide 36: Copper Demand
J\exans COPPER DEMAND LEVERAGE NEXANS’ UNIQUE OPERATIONAL MODEL TO COPE WITH SCARCITY - In million metric tons a Mion 35 ca N EUROPE, N RTH A AMERICA AND SOUTH AMERICA a7 c. = 23 99 5Y AGREEMENT WITH CODELCO re) RECYCLED COPPER & SCRAP USE r A% IN OUR PRODUCTS 1995 2021 2024 2030 mSupply m Demand 36
Slide 37: Sustainability Progresses
J\exans SUSTAINABILITY PROGRESSES ACKNOWLEDGED BY EXTRA-FINANCIAL AGENCIES OUR COMMITMENTS & INITIATIVES EXTRA-FINANCIAL RATINGS 2022 JMexans sas _ . 2021 =@QE : FOUNDATION ry yorlc sets eral cone GOALS 2022 7 ecovadis ° = >) SOIENCE ALUMINIUM RE A farses «FORWARD 2030 zo Pa: Se Memes eee ONE ORNS Q
Slide 38: Glossary
J\exans GLOSSARY Adjusted Generation & Transmission backlog: Backlog adjusted for secured but not yet implemented Subsea, Land and Special Telecom contracts EBITDA: Starting 2023, Nexans consolidated EBITDA is defined as operating margin before (i) depreciation and amortization, (ii) share-based pay