Nexans SA · EURONEXT:NEX
Nexans SA — Investor Presentation (November 2007)
29 slides from Nexans SA's investor presentation, November 2007
Slide 1: Group presentation November 2007
Group presentation November 2007
Slide 2: Safe Harbor
Safe Harbor This presentation contains forward-looking statements relating to the Group’s expectations for future financial performance, including sales and profitability. The forward looking statements contained in this presentation are dependent on known and unknown risks, expectations and assumpt
Slide 3: Agenda
AGENDA I. Nexans in the Cable Industry II. Financial performance III. Our Objectives & MT Target 2
Slide 4: A large and diversified industry
A large and diversified industry ▌ A worldwide market of $140 bn in 2006 ▌ Three end-user markets Building Industrial, Public & Residential Buildings •Medium & Low Voltage energy cables •Data & communication private networks (LAN, ..) Industry Infrastructures •Automotive, •Shipbuilding, Aeronautics
Slide 5: Industry dynamics: healthy LT drivers
Industry dynamics: healthy LT drivers ▌ An old industry with a bright future Worldwide Market Long-term drivers (at 2006 copper price) Energy networks : % Need to replace aging lines and interconnect 3.7 the networks GR % CA $156 Bn 4.8 Electrification programs in emerging GR $140 Bn 6.5 countries C
Slide 6: Nexans: the world-wide market leader
Nexans: the world-wide market leader ▌ 2006 Sales of 7,5 billion euro ▌ Full–line player 2006 Sales in M€ , actual metal price – main US & European players 7,489 Prysmian 5,007 (ex Pirelli) General 2,820 Cable Draka 2,524 Superior Essex 2,100 Commscope 1,249 Electrical Wires Leoni 1,154 (excl. harne
Slide 7: Nexans positioning: a full range approach
Nexans positioning : a “full range” approach Electrical Wires Energy Telecom Infrastructure Energy Public Networks Copper & Fiber Networks, 32 % of Sales Accessories including HV insulated cables 5 % of Sales END MARKETS & Umbilicals Industry Wirerod (mainly) Industrial Applications Special Telecom
Slide 8: A multi-regional strategy
A multi-regional strategy Our markets are of multi-regional nature with a need for local presence Europe Leader strategy 55 % of sales* Above 10% market shares Challenger position, present only in selected North America business segments : 20 % of sales* Strong positions in Canada (Energy) 15% of LA
Slide 9: II. Financial performance
AGENDA I. Nexans in the Cable Industry II. Financial performance III. Our Objectives & MT Target 8
Slide 10: 2003-2006: Nexans, a success story (1/2) - Growth
2003 - 2006 : Nexans, a success story (1/2) - Growth Nexans is growing faster than the market: organic CAGR(*) of +6.7% since 2003 vs +4.8% for the market driven by Energy cables (average +8.8%) Sales CAGR(*) (at constant metal prices) by cable types 12% 11,3% In M€ .7 % r 6 r yea 10% 8,2% + pe 9,5%
Slide 11: 2003-2006: Nexans, a success story (2/2) - Profitability
2003 - 2006 : Nexans, a success story (2/2) - Profitability Strong improvement of profitability: Operating Margin rate from 2.3% in 2003 to 5.8% of Sales (*) profitability restored both in Energy and Telecom cables Operating Margin OM rate (*) by cable types 9% ar 7.8% In M€ r ye 8% pe 7% 5.9% 7.7%
Slide 12: Nexans: a company that has been transformed
Nexans : a company that has been transformed Massive restructuring Break-even point lowered by 100 M€ since 2001 Selective M&A policy and organic development focused on: Higher added value segments Fast growing geographic areas Powerful Powerful operating operating leverage leverage created created
Slide 13: Geographic & business mix re-orientation: Acquisitions & Joint Ventures
Geographic & business mix re-orientation Acquisitions & Joint Ventures TVG Liban Cables Daesung Cable January 2007 PETRI July 2004 June 2001 June 2002 Kukdong December 2002 Minority Repurchase in Korea November 2006 Viscas Japan (JV) July 2006 LiOA Vietnam Furukawa cabos de Energia January 2006 Janu
Slide 14: Geographic & business mix re-orientation: Divestitures
Geographic & business mix re-orientation Divestitures Distribution Norway Winding Wires USA June 2005 August 2004 Tianjin Simcoe July 2007 April 2007 Winding Wires Europe February 2005 January 2007 Agro May 2002 Debt Debt reduction reduction == 370 370 M€ M€ Distribution Suisse February 2006 since s
Slide 15: Business mix reorientation: Higher exposure to specialty products
Business mix reorientation Higher exposure to specialty products 1,932 In M€ 1,730 OEMs •Naval Shipboard 1,558 •Automotive •Robotics Specialty Product + 18 % 386 •Nuclear •Handling 43% of Sales in 2006 +8% 327 BUILDING 304 +9% •LAN 393 •Safety of which + 16 % 362 •Heating cables 313 INFRASTRUCTURE P
Slide 16: Strong financial structure protected
Strong financial structure protected (in Million €) Dec. 31, 05 (*) Dec. 31, 06 Jun. 30, 07 Capital employed Non-current assets 999 1,255 1,234 Working capital 1,093 1,465 1,520 Assets (net) held for sale 42 38 31 Total to finance 2,134 2,758 2,785 Financed by Net financial debt 374 633 533 Reserves
Slide 17: III. Our Objectives & MT Target
AGENDA I. Nexans in the Cable Industry II. Financial performance III. Our Objectives & MT Target 16
Slide 18: Our medium term objectives
Our medium term objectives A Nexans group: More Profitable Less Cyclical More Streamlined With more Synergies between businesses 17
Slide 19: 2007-2009: a clear strategy
2007 – 2009: a clear strategy A strategy that requires several types of actions: Focus on our core businesses Energy Energy infrastructures infrastructures Consolidating Consolidating our our leadership leadership Industry Industry (Energy (Energy & & telecom) telecom) Commercial Commercial developm
Slide 20: 2007-2009: entering a cash generation phase
2007-2009 : entering a cash generation phase (*) Generating Cash (**) starting from 2007 (> 100 M€ during First Half 2007) … while financing important Capex programs around 500 M€ over three years Increased Increased M&A M&A capacity capacity (*) At HY 2007 metal prices, same economic trends and con
Slide 21: Q3 of 2007
Q3 of 2007 Robustness of the growth confirmed Further improvement of operating margin Cable activities growing 12.5% Focus on Energy Cables organically, of which: Energy infrastructures +9% Organic growth Industry +18.3% 14% 13,2% 12,6% Building +15.5% 12% 11,3% 12,9% 12,5% 10% 8,2% 9,5% 8% 8,6% 6%
Slide 22: 2007 outlook
2007 outlook Objectives for FY 2007: Double digit organic growth for the Cable activities Operating margin above HY level of 7.6% Decrease of net debt compared to December 2006 level (*) ROCE improvement compared with 2006 (*) (**) Restructuring of 30 M € Investments around 195 M€ (*) at Q3 2007 cop
Slide 23: exdans
exdans Newan
Slide 24: Appendices
SNexans Appendices
Slide 25: Strong operating leverage created
Strong operating leverage created (in Million €) 2004 2005 2006 Sales at current metal price 4,732 5,449 7,489 Sales at constant metal price 4,005 258 4,263 179 4,442 Margin on variable costs 1,022 1,104 1,209 Margin on variable costs (%) 25.5 % 26 % 27.2% Indirect costs (*) (800) (823) (854) EBITDA
Slide 26: Energy
Energy Sales Sales (M€) (M€) (*) (*) Operating Operating Margin Margin (M€) (M€) at at constant constant metal metal prices prices and and exchange exchange rates rates Σ: 1,546 1,883 Σ: 99 160 589 Building 65 486 Infrastructure 784 42 668 Industry 56 37 392 510 39 20 HY ´06 HY ´07 HY ´06 HY ´07 (*)
Slide 27: Telecom
Telecom Sales Sales (M€) (M€) (*) (*) Operating Operating Margin Margin (M€) (M€) at at constant constant metal metal prices prices and and exchange exchange rates rates Σ: 239 276 Σ: 13 27 Private networks 147 (LAN) 18 125 Infrastructure 7 114 129 9 6 HY ´06 HY ´07 HY ´06 HY ´07 (*) Annual change i
Slide 28: Electrical Wires
Electrical Wires Sales Sales (M€) (M€) (*) (*) Operating Operating Margin Margin (M€) (M€) at at constant constant metal metal prices prices and and exchange exchange rates rates Σ: 433 287 Σ: 2 4 Wirerod, Bare conductors and Winding Wires HY ´06 HY ´07 HY ´06 HY ´07 (*) Annual change in sales = - 3
Slide 29: exdans
exdans Newan