Nexans SA · EURONEXT:NEX
Nexans SA — FY2015 Earnings Presentation
39 slides from Nexans SA's earnings presentation, Feb 18, 2016
Slide 1: 2015 Full Year results
Mereeect BRINGS ENERGY TO LIFE
Slide 2: Safe Harbor
Safe Harbor Forward-looking statements in this presentation are subject to various risks and uncertainties that could affect the Company's future performance. Actual results could therefore differ significantly from those currently expected or anticipated. Readers are also invited to log onto th
Slide 3: 1. Nexans brings Energy to Life
1. Nexans brings Energy to Life Arnaud Poupart-Lafarge CEO A few moments of pride
Slide 4: Nexans brings Energy to Life: connecting countries
Nexans brings Energy to Life Energy transition and efficiency Connecting countries to secure and optimize Power networks NSN Link, the world’s longest subsea power link incorporating Nexans’ HVDC cable technology NordLink HVDC interconnector between Norway and Germany 4 I 2015 Full Year results
Slide 5: Nexans brings Energy to Life: renewable energy connections
Nexans brings Energy to Life Energy transition and efficiency Strengthening network connections to Renewable Energy sources “Safety net Britanny” “HyWind” pilot floating project with RTE wind farm by Statoil Nexans 225 kV power link across Nexans to supply static and dynamic Britanny to secure the n
Slide 6: Nexans brings Energy to Life: solar power plants
Nexans brings Energy to Life Energy transition and efficiency Supporting the development of major Solar Power Plants The Fonte Solar I & II in Brazil Cestas Solar Farm in France The biggest photovoltaic complex 5,000 km of Nexans of Brazil, is equiped with 210 km photovoltaïc cables to connect of Ne
Slide 7: Nexans brings Energy to Life: intra-city transport
Nexans brings Energy to Life Demographic development and urbanization Providing reliable cables for intra-city transport infrastructures Nexans MV and LV Alsecure cables to equip the new 20 km long metro line in Istanbul,Turkey. Once completed in 2017, the new metro line will be able to carry 65,000
Slide 8: Nexans brings Energy to Life: oil & gas offshore platforms
Nexans brings Energy to Life Economic development Full cable solutions for Oil & Gas off-shore platforms Nexans unic provider of cables Nexans subsea cables for TOTAL deep sea Egina to bring Power to the offshore Oil floating platform super complex serving Abu Dhabi’s Nasr oil field 2,200 km of Nexa
Slide 9: Nexans brings Energy to Life: data exchange
Nexans brings Energy to Life Increasing Data exchange Optical Fiber and LAN solutions for high-speed Data traffic High speed broadband Optical High performance cables for BNP Fiber cable “Nexans ROC-2” Paribas Data Center chosen by Nigeria & Cameroon ~1,100 km of Repeated Optical Nexans to design an
Slide 10: Nexans Excellence Way
Nexans Excellence Way Experience in Lean Manufacturing extended to an Enterprise wide initiative LEAN Manufacturing Focus on performance Standard Management Routines improvement Visual management S Safety Structured problem solving approach Q Quality SQCDE focus C Cost Continuous Improvement D
Slide 11: Nexans Excellence Way: Safety first
Nexans Excellence Way Safety first Accident frequency rate has been divided by 4 in 5 years 9.18 Safety rate is tracked as our prime industrial performance indicator 7.42 GROUP SAFETY DAY 5.24 4.12 Over 25,000 employees 3.19 on 160 sites participated 2.1 in our second Group 0.30 0.29 Safety Day in J
Slide 12: Nexans Fondation
Nexans Fondation 4th Call for projects 12 I 2015 Full Year results
Slide 13: 2. Business Performance
2. Business Performance Arnaud Poupart-Lafarge CEO
Slide 14: Nexans accelerates its transformation
Nexans accelerates its transformation - 1.7% organic growth Operating margin + 32% 195 M€ 4,587 M€ 4,604 M€ 148 M€ 4.2% Sales at HY 2 HY 2 constant metal -2.6% Operating prices margin 3.2% HY 1 HY 1 -0.8% 2014 2015 2014 2015 Strong cash generation 3 different dynamics + 14% 531 460 - 20% - 2% strong
Slide 15: Navigating in a contrasted business environment
Navigating in a contrasted business environment Organic growth by region in First and Second Half 2015 and % of yearly Sales by origin(*) +19.2% +12.4% +9.0% -1.7% -2.6% EUROPE -2.1% Harnesses -4.2% 30% of Sales +15.7 % High Voltage 10% of Sales +2.6% 18% of Sales -14.4% -16.0% +11.7% -5.4% -7.8% No
Slide 16: Distributors & Installers: Strong margin recovery
Distributors & Installers: Strong margin recovery driven by portfolio selectivity and LAN performance Sales (constant metal prices): 1,136 M€ Operating margin: 63 M€ Yoy organic growth: - 2.7 % OM on sales: 5.5 % -6 % +8 % SAM 5.5 % -1 % Building LAN FX APAC -2 % MERA +4 % 2.3 % NAM - 2% Europe 2014
Slide 17: Industry: Profitability gains confirmed despite flat markets
Industry: Profitability gains confirmed despite flat markets in second half Sales (constant metal prices): 1,250 M€ Operating margin: 57 M€ Yoy organic growth: - 0.4 % OM on sales: 4.6 % Yoy organic growth by sector: 4.6 % RESSOURCES OTHER -5% Others 15% - Automation 4.1 % 20% of Sales - 40 % Mining
Slide 18: Utilities & Operators: margins improved while markets remain challenging
Utilities & Operators: margins improved while markets remain challenging Sales evolution in M€ and organic growth Operating margin improvement -4% Operators Utilities -2% FX & scope Utilities Operators FX & -3.6 % scope 2014 2015 2014 2015 Utilities: Operators: Activity globally stable in Europe,
Slide 19: Transmission: Dynamic tender activity in contrasted markets
Transmission: Dynamic tender activity in contrasted markets Organic Growth: + 2.9 % Land high voltage: Slow ramp-up of Chinese and US new plants 25% of Sales LAND - 12.5 % Land HV Plant load optimization and cost reduction programs in Europe where market conditions remain uncertain 75% of Sales
Slide 20: Strategic initiatives delivered as expected
Strategic initiatives delivered as expected to overcome volume & price pressure effects Operating margin evolution in M€ 106 (53) (13) 195 Price Cost Operating 148 squeeze reserves FX & Strategic others Initiatives 2014 2015 20 I 2015 Full Year results
Slide 21: Fixed cost reduced ahead of schedule
Fixed cost reduced ahead of schedule: + 62 M€ impact in 2015 2013 European restructuring New European restructuring plan plan fully implemented approved and launched Savings run-rate reached end of 2015 Other plans well under way Industry: 35 M€ Closure of 3 plants and transfer 30 M€ 70 M€ of activi
Slide 22: Industrial & Commercial Excellence
Zoom on other initiatives Variable cost reduction: Market Leadership: + 10 M€ + 34 M€ Purchasing Saving plans delivering as Market Leadership initiatives well on expected, through three main levers track Negotiation lever Business strategy roll-out Supplier management Common methodologie
Slide 23: 2. Financial Results
2. Financial Results Nicolas Badré CFO
Slide 24: Key Figures
Key Figures In M€ 2014 2015 Sales at current metal prices 6,403 6,239 Sales at constant metal prices 4,587 4,604 EBITDA(*) 288 333 Operating margin 148 195 Restructuring costs (51) (100) Net income (Group share) (168) (194) Operational Cash Flow 101 191 Net debt 460 201 Note: (*) Operating margin be
Slide 25: Income Statement (1/2)
Income Statement (1/2) In M€ 2014 2015 Sales at constant metal prices 4,587 4,604 Margin on variable costs 1,390 30.3% 1,428 31.0% Indirect costs (1,102) (1,095) EBITDA(*) 288 6.3% 333 7.2% Depreciation (140) (138) Operating margin 148 3.2% 195 4.2% Core exposure effect (4) (52) Restructuring costs
Slide 26: Significant impairments: environment changes in 2015
Significant impairments: environment changes in 2015 Total: 129 M€ (*) Main impact: further drop of prices in O&G and NAM Mining in 2015 have led to reduced perspectives from main customers 63 M€ Residual goodwill: 29 M€ Changes in local macro-economical and political SAM environment. Impacts
Slide 27: Income Statement (2/2)
Income Statement (2/2) In M€ 2014 2015 Operating income (35) (66) Financial charge (103) (105) Income before tax (138) (171) Income tax (32) (25) Net income from operations (170) (196) Net income Group share (168) (194) 27 I 2015 Full Year results
Slide 28: Balance Sheet
Balance Sheet Dec 31, Dec 31, In M€ 2014 2015 Long-term fixed assets 1,737 1,643 of which goodwill 303 250 Deferred tax assets 153 192 Non-current assets 1,890 1,835 Working Capital 803 405 Total to finance 2,693 2,240 Net financial debt 460 201 Reserves 709 690 Deferred tax liabilities 91 84 Deriva
Slide 29: Strong cash generation
Strong cash generation Metal price Net debt evolution in M€ Down-payments (104) 345 HV 460 191 Inventories (170) & payables Restructuring cash-out (55) 201 OCF CAPEX 52 Operating Working Capital Non FX & Operating Other WC 2014 2015 29 I 2015 Full Year results
Slide 30: Strong liquidity covering future debt refinancing needs
Strong liquidity covering future debt refinancing needs Liquidity and debt redemption(*) as of December 2015, in M€ 2019 Un-drawn Convertible facility 600 Bond 2.50% 1,213 committed 2018 up to 2020 Bond 4.25% 275 2017 Bond 5.75% 250 Cash & equivalents 1,012 Local borrowings & 350 2016 others Convert
Slide 31: 3. Perspectives
3. Perspectives Arnaud Poupart-Lafarge CEO
Slide 32: On the way to 2017
On the way to 2017 Target contribution of Strategic initiatives is confirmed Market Operating margin evolution, in M€ leadership Variable Cost reduction 150 Fixed Cost reduction Price / Cost 90 squeeze 135 Uncertainty relies on environment in 2017 2016/2017 2015 Remaining to do 2014 Achieved 2015 32
Slide 33: Zoom on portfolio management
Zoom on portfolio management Capital Employed Capital Employed End of 2014 End of 2015 2.6 b€ 2.1 b€ Underperforming Businesses Other Businesses c.350 M€ that could be tested for best owner or business combination Divested to date: Confecta (Germany) Indelqui (Argentina) 33 I 2015 Full Year results
Slide 34: 2016 priorities
2016 priorities: Keep momentum on Strategic initiatives to ensure: Further improvement of ROCE and Operating margin Limited cash consumption in 2016 Fixed Cost Variable Cost Market Leadership Reduction Reduction Face depressed Capture the full Continue to deploy O&G markets impact of Purch
Slide 35: Questions & Answers
> — = Questions & Answers
Slide 36: 2015 Full Year results
Mereeect BRINGS ENERGY TO LIFE
Slide 37: Appendices
ppendices _ ‘— A
Slide 38: Sales and profitability by segment
Sales and profitability by segment 2014 2015 In M€ Sales OM OM % Sales OM OM % Transmission, Distribution & 1,978 98 5.0% 1,935 108 5.6% Operators Industry 1,213 50 4.1% 1,250 57 4.6% Distributors & Installers 1,120 26 2.3% 1,136 63 5.5% Other 276 (26) n/a 283 (33) n/a Total Group 4,587 148 3.2% 4,6
Slide 39: Impact of foreign exchange and consolidation scope
Impact of foreign exchange and consolidation scope Organic 2014 FX growth Scope 2015 Sales at constant metal prices, in M€ Transmission, Distribution 1,978 (12) (23) (8) 1,935 & Operators Industry 1,213 56 (5) (14) 1,250 Distributors & Installers 1,120 48 (32) - 1,136 Other 276 12 (19) 14 283 Total