Nexans Sa · EURONEXT:NEX
Nexans Sa — H1 2020 Earnings Presentation
43 slides from Nexans Sa's earnings presentation, Jul 29, 2020
Slide 1: 2020 Half Year Results
2020 Half Year Results Robust performance in challenging environment, engaged global team, “walking the talk” on Nexans strategy | Swiftly deployed Crisis Mode to protect employee’s health & safety, while delivering Production Continuity | Record Free Cash Flow enhanced by tight working capital mana
Slide 2: Safe Harbor
Safe Harbor NB: Any discrepancies are due to rounding. 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’
Slide 3: Agenda
AGENDA Agenda 1. Highlights 2. Main achievements 3. Key Financials 4. Outlook 5. Appendices 3 | Nexans 2020 HY Results
Slide 4: Christopher Guérin, CEO
01 01 02 03 04 05 06 Christopher GUÉRIN CEO
Slide 5: NEXANS HY 2020: Robust performance in Challenging Times
NEXANS HY 2020: Robust performance in Challenging Times Robust Performance & Engaged Global Team 1 Crisis unit focus: team health & safety, production continuity, customer satisfaction and liquidity preservation Record Free Cash Flow 2 Improved cash conversion cycle Enhanced liquidity and massive ne
Slide 6: Delivering Robust Performance and Record Free Cash Flow in Challenging Times
Delivering Robust Performance and Record Free Cash Flow in Challenging Times EBITDA ROCE(1) FREE CASH FLOW 162 M€ in HY 2020 11.1% in HY 2020 +231 M€ in HY 2020 211 11.1% 11.1%(3) 252 231(4) 195 200 9.0% 8.8% 162(2) 153 87 (147) (170) H1-17 H1-18 H1-19 H1-20 Dec.18 June 19 Dec.19 June 20 (227) H1-17
Slide 7: Great Stability and Leadership in the Storm
Great Stability and Leadership in the Storm Nexans teams active on all fronts 1 2 3 4 Supply chain & Liquidity preservation & Workforce protection Customer engagement operation stabilization financial modelization | 50 employees tested | 100% of units running in | Tier 1 customers | Lower level of i
Slide 8: Delivering on Strategic Investments
Delivering on Strategic Investments Cutting-edge assets for energy transition ON TRACK ON TRACK The unique HV Subsea cable AURORA State-of-the-art cable laying vessel CHARLESTON manufacturing plant in North America Aurora The hull of the CLV Aurora arriving Ulstein Verft June 2020 for final construc
Slide 9: Paving the Way to a Stronger New Nexans
Paving the Way to a Stronger New Nexans SIGNED SIGNED Sale agreement of Nexans Sale agreement of Berk-Tek LLC Metallurgie Deutschland GmbH to Leviton Manufacturing (NMD) to Mutares SE & Co. KGaA Co.Inc, for US$ 202 million Nexans NMD: leading oxygen-free copper rod mill and Berk-Tek: leading US base
Slide 10: Christopher Guérin, CEO
02 Christopher GUÉRIN CEO
Slide 11: Jumpstarting the Recovery or Just a Pause before a Second Wave?
Jumpstarting the Recovery or Just a Pause before a Second Wave? In this unprecedented reality, June & July demonstrated a strong rebound of activity in all sectors, including Automotive, but all economic forecasts are intimately linked to second Covid-19 Wave risk. Manufacturing PMI (IHS Markit) – S
Slide 12: Overview of COVID-19 Impacts on Demand per Business Group
Overview of COVID-19 Impacts on Demand per Business Group From March 15th to June 30th Building & Territories Industry & Solutions Covid-19 impact on key markets Quarterly Sales Covid-19 impact on key markets Quarterly Sales (in M€) -8.0% (in M€) 715 671 645 -19.6% 587 379 344 332 Automotive Automat
Slide 13: High-Voltage & Projects: A Solid and Profitable Backlog with Limited Risks
> €10 Bn€** High-Voltage & Projects: A Solid and Profitable Backlog with Limited Risks total project pipeline Backlog* of 1,5 Bn€ and above 80% load ratio for 2020-2022 Preparing for next deals to come, with robust pipeline ahead Nexans subsea projects under execution A selection future subsea inter
Slide 14: Transformation Plan Accelerated and Reinforced
Transformation Plan Accelerated and Reinforced Key enabler to weather the storm REINFORCED BY 2021 WE WILL ACHIEVE 210M€ of Cost savings In parallel we will reorganize the Group in a leaner way, re-engineer our Capex Cost reduction financial policy, and resize Headquarters. Savings HY 2020 Fixed cos
Slide 15: SHIFT Program: a Key Enabler for Cash Generation
SHIFT Program: a Key Enabler for Cash Generation ON TRACK A unique method to : What is 1. Understand the root causes generating SHIFT reached 59 M€ financial inefficiencies 2. Challenge preconcive way of thinking 100 ? through big data analysis & leading edge turnaround methodologies ... SHIFT is no
Slide 16: Jean-Christophe Juillard, CFO
03 Jean-Christophe JUILLARD CFO
Slide 17: Robust Performance across all Business Units
Robust Performance across all Business Units Key figures EBITDA evolution in M€ In M€ June 2019 June 2020 226 4 Sales at current metal prices 3,432 2,953 Sales at standard metal prices* 3,271 2,895 30 Organic growth +5.0% (9.8)% 195 +70M€ (64) Margin on variable costs 712 622 (7) 9 Margin rate** 21.
Slide 18: EBITDA Improvements in line with Transformation Targets but impacted by Challenging Environment
EBITDA Improvements in line with Transformation Targets but impacted by Challenging Environment 195 +16% 226 16 (15) 19 (64) 162 (7) 49 (31) June 2019 FX & Scope PCS & labor Cost reduction Transformation Value Growth Conjunctural June 2020 Estimated June 2020 inflation initiatives Plan SHIFT initiat
Slide 19: Net Income
Net Income Key figures From Operating Margin to Operating Income In M€ June 2019 June 2020 83 Operating margin 113 83 (53) M€ (32) reorganization costs Reorganization costs (182) (53) Other costs 15 (25) (21) Operating income (54) 4 (25) 4 Financial charge (31) (19) Operating New Nexans Other Other
Slide 20: Net Debt Reaching Record Low Level Thanks to Free Cash Flow Generation
Net Debt Reaching Record Low Level Thanks to 370 M€ Free Cash Flow Generation Net Debt last 12 months evolution in M€ Leverage(1) Leverage(1) 1.9x 0.8x (182) 419 140 (210) (49) 0 (276) 114 (17) (13) (18) (389) 140 392 FCF Generation: 370 M€ (709) Net debt Cash from Change in Reorganization CAPEX Fin
Slide 21: Significant Improvements on Working Capital and ROCE
Significant Improvements on Working Capital and ROCE Operating Working Capital ROCE* 12 month evolution (in %) o DIO : 5 days reduction OWC/Sales** 13,2% 12.4% (10% improvement) 2.9% 1,2% o DSO: 12 days reduction (2,1)% (20% improvement) 11,1% 3,6% 8,8% (0.4)% 6.5% OWC High Voltage Cables OWC Estima
Slide 22: Balance Sheet
Balance Sheet Stronger Balance Sheet despite Covid-19 with Significant Headroom on Covenants Balance Sheet Interest Charge over EBITDA In M€ Dec 2019 June 2020 Interest / EBITDA 10% 9% 11% Fixed assets and other non-current assets 1,878 1,816 Interest Charge Of which goodwill 242 237 June 2019 Dec 2
Slide 23: Record Liquidity Level to Support a Stronger New Nexans
Record Liquidity Level to Support a Stronger New Nexans Net Debt breakdown (incl. IFRS 16) Liquidity and debt redemption schedule In M€ In M€ June 2020(1) 1,805 (3) 1,304 1,628 177 Gross Debt 1,304 200 Undrawn facility 600 Cash and cash equivalents (1,028) committed up to 2023 325 Net Debt 276 250 C
Slide 24: Outlook
04 OUTLOOK Christopher GUÉRIN CEO
Slide 25: 2020 Guidance Reinstated
2020 Guidance Reinstated EBITDA ROCE(1) FREE CASH FLOW(2) Between Between Positive 310 and 370 M€ 7% to 10% As the global situation, dictated by the pandemic outbreak, has now marginally firmed up and considering the actions taken in the first semester by the Group to mitigate the impacts of the pan
Slide 26: Paving the Way for a Stronger New Nexans
Paving the Way for a Stronger New Nexans 1 Pursue accelerated deployment of “New Nexans” plan (Cost Reductions, SHIFT program & Strategic growth initiatives) 2 Reinforce sustainable Productivity and Working Capital improvement above and beyond crisis 3 Focus key resources on Innovation, Services & S
Slide 27: Appendices
APPENDICES 05
Slide 28: Nexans brings Energy to Life
Nexans brings Energy to Life APPENDICES Global Cable solution Provider For over 120 years, Nexans has brought energy to life HIGH BUILDING & by providing customers with advanced cabling TERRITORIES VOLTAGE systems, solutions and innovative services & PROJECTS The Group designs solutions and serv
Slide 29: Sales by business segments and geography
Nexans brings Energy to Life APPENDICES APPENDICES Sales by business segments Sales by geography** High Voltage & Projects High Voltage & Projects 13% Others 12% 17% Telecom & Data Europe 8% North 21% 38% America Industry & Solutions 23% Asia Pacific 12% South America Middle East, 42% 7% Russia, Bui
Slide 30: Four main Sectors End Markets
Nexans brings Energy to Life APPENDICES APPENDICES Four main Sectors End Markets Customers Products: Low & Medium voltage cables & accessories Solutions: smart energy management Building Differentiation: safety, environment, efficiency Smart Cities / Smart Grids Building & Building: property con
Slide 31: Nexans Ready for Value migration scenarios
Nexans Ready for Value migration scenarios APPENDICES Overall energy & data management market expected to grow at +4-5% per year Value migration patterns Drivers Concrete example How Nexans get prepared to capture the value Emerging 60% • World & urban • World population will grow • Nexans opens new
Slide 32: Sales and profitability by Segment
Sales and profitability by Segment APPENDICES June 2019 June 2020 In M€ Sales EBITDA EBITDA % OM OM % Sales EBITDA EBITDA % OM OM % Building & Territories 1,386 80 5.8% 55 3.9% 1,233 58 4.7% 33 2.7% Industry & Solutions 723 58 8.0% 39 5.4% 598 30 5.0% 12 1.9% Telecom & Data 264 25 9.5% 20 7.6% 220 1
Slide 33: Impact of foreign exchange and consolidation scope
Impact of foreign exchange and consolidation scope APPENDICES Organic Sales at constant metal prices, in M€ June 2019 FX Scope June 2020 growth Building & Territories 1,386 (33) (120) 0 1,233 Industry & Solutions 723 (2) (123) (0) 598 Telecom & Data 264 (2) (42) 0 220 High Voltage & Projects 337 (25
Slide 34: HY-20: Sound performance across Businesses in Covid-19 crisis
HY-20: Sound performance across Businesses in Covid-19 crisis APPENDICES BUILDING & INDUSTRY TELECOM HIGH TERRITORIES & SOLUTIONS & DATA VOLTAGE & PROJECTS Resilient operations reflecting Contrasted activity: subdued Muted volumes under the Steady growth in Subsea the mix between Building volumes fo
Slide 35: Building & Territories
Building & Territories APPENDICES Sales at standard metal price: 1,233 M€ Business Update ⚫ Slowdown in Building activities paced by the pandemic spread & lockdown measures ⚫ Stable Territories activity over the period, benefited from fiscal stimulus support & grid Organic growth +7.5% -0.4% -8.9% r
Slide 36: Industry & Solutions
Industry & Solutions APPENDICES Sales at standard metal price: 598M€ Business Update ⚫ Auto harness and aerospace sharp drop in demand due to Covid-19 ⚫ Wind Turbine remained dynamic supported by the Energy Transition trend. Organic growth +2.2% -1.6% -17.1% ⚫ Rail Infrastructure & Rolling Stock sta
Slide 37: Telecom & Data
Telecom & Data APPENDICES Sales at standard metal price: 220M€ Business Update ⚫ Weak activity in Europe for Fiber optic despite buoyant in Sweden ⚫ Sound demand in North America & Europe offset by Covid-19 lockdowns in China Organic growth +7.7% -1.8% -15.9% ⚫ Dynamic trend in Subsea telecom 1 Cost
Slide 38: High Voltage & Projects
High Voltage & Projects APPENDICES Sales at standard metal price: 376 M€ Business Update ⚫ Subsea: backlog execution on schedule, benefitting from continued operations Organic growth -6.0% +20.1% +20.4% of manufacturing and installation. Contracting activity continued to be sound ⚫ Land: business br
Slide 39: Building & Territories: Serbia power plant contract
Nexans brings Energy to Life APPENDICES Building & Territories NEXANS WINS MAJOR POWER CABLE CONTRACT FOR THE REGENERATION OF SERBIA’S LARGEST POWER PLANT Nexans to provide fire retardant power cables part of the The project to reduce sulfur dioxide and particulates emissions ENERGEN® offer to Copte
Slide 40: Industry & Solutions
Nexans brings Energy to Life APPENDICES Industry & Solutions Nexans has secured a three-year Nexans Solar Technologies (NST) Nexans has delivered 1,700 km global frame agreement with Alstom has signed its first contract of a special signaling cable design, manufacture and supply high design, manufac
Slide 41: Industry & Solutions: deals signed
Nexans brings Energy to Life DEALS SIGNED Industry & Solutions APPENDICES SMAC PROJECT: WIND ENERGY SUPPORTING Alongside Enedis, the Ardenne Metropolitan District, THE USE OF ELECTRIC VEHICLES Nexans and other partners are providing their Nexans signed a partnership agreement for the SMAC expertise
Slide 42: Telecom & Data: Innovation
Nexans brings Energy to Life INNOVATION Telecom & Data APPENDICES NEXANS DELIVERS IN A RECORD TIME FAST-TRACK FIBER OPTIC INFRASTRUCTURE PROJECT FOR THE SOCIÉTÉ DU GRAND PARIS’ NEW HEAD OFFICE Nexans has successfully completed a fast-track project for the Société du Grand Paris (SGP) to deploy 100 p
Slide 43: High Voltage & Projects
Nexans brings Energy to Life APPENDICES High Voltage & Projects NEXANS WINS MAJOR SUBSEA HVDC CABLE CONTRACT FROM TURNKEY CONTRACT TO SUPPLY POWER EXPORT CABLES FOR GREECE’S ARIADNE INTERCONNECTION S.P.S.A SCOTLAND’S SEAGREEN OFFSHORE WINDFARM PROJECT Nexans will design, manufacture and Nexans has b