Nexans Sa · EURONEXT:NEX
Nexans Sa — H1 2021 Earnings Presentation
43 slides from Nexans Sa's earnings presentation, Jul 28, 2021
Slide 1: 2021 First Half Results
exans ELECTRIFY THE FUTURE 2021 FIRST HALF NN NEXANS he a STRONG PERFORMANCE SUPPORTS ‘STRUCTURAL VALUE GROWTH ‘ , » < \ CHRISTOPHER GUERIN, CEO JEAN-CHRISTOPHE JUILLARD, CFO 28 JULY 2021 PARIS
Slide 2: Forward-looking statements
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’s website where they can view and download the 2020 ann
Slide 3: Outlook and Appendices
#04 OUTLOOK #05 APPENDICES
Slide 4: Highlights
J\lexans AQ 02 03 O04 05 HIGHUGHTS. BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES
Slide 5: H1 2021: Strong performance supports structural value growth
J\exans 201 HIGHLIGHTS 02 BUSINESS OVERVIEW 03 KEY FINANCIALS O04 OUTLOOK O5 ‘APPENDICES H1 2021: STRONG PERFORMANCE SUPPORTS STRUCTURAL VALUE GROWTH + Demand upturn: +12%l') in sales with positive mix/price management + Record EBITDA: selective growth, raw material management, complexity and cost r
Slide 6: H1 2021: Record EBITDA, solid ROCE improvement and steady positive free cash flow
201 02 03 O04 O5 J\exans HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES H1 2021: RECORD EBITDA, SOLID ROCE IMPROVEMENT AND STEADY POSITIVE FREE CASH FLOW €222M 14.2% €90M IN HI 2021 ROCEN (7%) IN JUNE 2021 INH1 2021 153 195 , 162, 222 9.2% | 88% | 111% 14.2% 231 90 ' : , } , " : (14
Slide 7: H1 2021: Key milestones reached across the Group
J\exans 201 HIGHLIGHTS 02 03 KEY FINANCIALS O04 O5 BUSINESS OVERVIEW ouTLooK [APPENDICES H1 2021: KEY MILESTONES REACHED ACROSS THE GROUP FEB 17 MAY 2 JUNE 8 JUNE 28 Capital Markets day: Nexans to 5 partnerships in risk Implementation of a Naming ceremony for Best investor become an Electrification
Slide 8: Exceeding 2019-2021 New Nexans transformation plan
008 J\exans 201 02 03 O04 O5 HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES EXCEEDING 2019-2021 “NEW NEXANS” TRANSFORMATION PLAN PORTFOLIO MIX, COST & COMPLEXITY REDUCTION TARGETS BASED ON 2019-21 EQUITY STORY, THE COMPANY WILL BE TURNAROUND BY 2021, WITH NO MORE VALUE BURNERS Split
Slide 9: Raw material price inflation pass-through protecting margins
201 SNexa ns HIGHLIGHTS RAW MATERIAL PRICE INFLATION PASS-THROUGH PROTECTING MARGINS POSITIVE CORE EXPOSURE IMPACT IN OTHER OPERATING ITEMS UNIQUE FULLY INTEGRATED MANUFACTURING PROCESS 02 BUSINESS OVERVIEW 03 KEY FINANCIALS O04 OUTLOOK O5 ‘APPENDICES Conductor (Copper, Aluminum] PASS-THROUGH: A STR
Slide 10: Nexans Aurora cable laying vessel ready to sail to secured projects
J\lexans 201 HIGHLIGHTS 02 BUSINESS OVERVIEW 03 KEY FINANCIALS 04 OUTLOOK 05 ‘APPENDICES NEXANS AURORA STATE-OF-THE-ART CABLE LAYING VESSEL READY TO SAIL TO SECURED PROJECTS
Slide 11: Addressing customer pain points
JNexans ADDRESSING CUSTOMER PAIN POINTS A CONSERVATIVE ESTIMATE OF THE ANNUAL TOTAL VALUE OF DAMAGES FROM COPPER WIRE THEFT ACROSS IMPACTED INDUSTRIES IN THE UNITED STATES WOULD BE $900 MILLION* COPPER PRICE $10,000/TON WORLD COPPER CABLE MARKET IN 2019 €127 BILLION COPPER CONSUMPTION BETWEEN 2019-2
Slide 12: Nexans: Amplify innovation (Vigishield)
JNexans amplify NEXANS: AMPLIFY INNOVATION FOCUSING ON CUSTOMER NEEDS IN'AN INNOVATIVE WAY A NEW NEXANS CONNECTED SOLUTION THAT KEEPS VIGISHIELD | YOUR CABLES UNDER SURVEILLANCE EVERYWHERE, AT ALL TIME Y IN THE TRUCK, ON THE REEL, NO DELAYS NOR COST INCREASE ELIMINATE UNFORESEEN COSTS. ® PERMANENT S
Slide 13: Progress made on our ESG journey
201 02 03 O04 O5 J\lexans HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES PROGRESS MADE ON OUR ESG JOURNEY MSCI- BBB RATING MAINTAINED GOVERNANCE ENVIRONMENT ECOSYSTEM ™ SUPPLIERS RESPONSIBLY. PRODUCED COPPER exans SHARE OUR VALUES AT THE HIGHEST ETHICAL STANDARDS WITH OUR STAKEHOLDE
Slide 14: Business overview
J\lexans Ol 202 03 O04 O5 HIGHLIGHTS BUSINESS. OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES
Slide 15: Electrification
ELECTRIFICATION GENERATION A N D TRANSMISSION DISTRIBUTION USAGES IMR IMR
Slide 16: Electrification
ELECTRIFICATION GENERATION A N D TRANSMISSION DISTRIBUTION USAGES
Slide 17: Industry & Solutions and Telecom & Data
J\exans 01 302 03 O04 O5 HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES INDUSTRY & SOLUTIONS GROWTH DRIVEN BY AUTO-HARNESSES AUTOMATION: Boost in sales supported AUTO-HARNESSES: Outstanding by demand in Europe. performance driven by continued TRANSPORT®!: First sign of recovery in r
Slide 18: Key financials
Ol HIGHLIGHTS 02 BUSINESS OVERVIEW Cee KEY FINANCIALS. 04 OUTLOOK 05 ‘APPENDICES - exans
Slide 19: Net asset impairment
Of which: net asset impairment (15)
Slide 20: EBITDA margin growth by +155 bps to reach 7.1% in H1 2021
J\exans Ol 02 303 O04 O5 HIGHUGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK (APPENDICES: EBITDA MARGIN GROWTH BY +155 BPS TO REACH 7.1% IN H1 2021 @ 7.1% EBITDA 43 wr 15 22 a es) 222 37 m7 3 i (29) +€74m EBITDA “New Nexans” Transformation Plan JUNE 2020 FX & Scopel” PCS & Cost reduction SHIFT Value
Slide 21: Net debt reaching 10-year low thanks to free cash flow conversion
J\exans Ol 02 303 O04 O5 HIGHUGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK APPENDICES NET DEBT REACHING 10-YEAR LOW THANKS TO CONTINUED FREE CASH FLOW CONVERSION NET DEBT LAST 6 MONTHS EVOLUTION (€m) FCF GENERATION excl. M&A. : [1 €90m J . Leverage Leverage 0.7x(0) 0.4x!") (61) 4 96 (96) (20) 12 (1
Slide 22: Best-in-class operating working capital
O5 ‘APPENDICES 303 KEY FINANCIALS O04 OUTLOOK Ol HIGHLIGHTS 02 BUSINESS OVERVIEW J\exans BEST-IN-CLASS OPERATING WORKING CAPITAL REFLECTING SUCCESFULL TRANSFORMATION OPERATING WORKING CAPITAL AND CURRENT SALES EVOLUTION — 12-MONTH ROLLING AVERAGE (€m) : Current sales 12-month average rolling Operati
Slide 23: Solid balance sheet
J\exans Ol 02 303 O04 O5 SOLID BALANCE SHEET KEY FIGURES In millioneuros DEC. 20 JUN. 21 Fixed assets 1,827 1,867 Other non-current assets 115 100 Non-current assets 1,942 1,967 Working Capital 176 132 Total to finance 2,118 2099 Net financialdebt 179 112 Reserves 550 510 Other non-current liabiliti
Slide 24: Net debt breakdown, liquidity and debt redemption schedule
Nexans 01 02 03 04 05 HIGHUGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK (APPENDICES: NET DEBT BREAKDOWN LIQUIDITY AND DEBT REDEMPTION SCHEDULE (m) In milion euros DEC, 20°) JUN. 21° Us eine GROSS DEBT Gross Debt 1,320 1,018 1,507 Cash and cash equivalents (1147) (907) NetDebt 179 112 wn ape ory too
Slide 25: Appendices
‘APPENDICES. Cees en eo, wa
Slide 26: 2021 guidance: EBITDA and ROCE raised, free cash flow confirmed
J\fexans 01 HIGHLIGHTS 02 BUSINESS OVERVIEW 03 KEY FINANCIALS >04 ‘OUTLOOK O5 ‘APPENDICES 2021 GUIDANCE: EBITDA AND ROCE RAISED, FREE CASH FLOW CONFIRMED EBITDA ‘ ROCEM BETWEEN €430m AND €460m BETWEEN 13% AND 15% BETWEEN € 100m AND €150m (PREVIOUSLY BETWEEN €410m AND €450m) (PREVIOUSLY BETWEEN 12.5%
Slide 27: Appendices
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Slide 28: Nexans: Electrify the future
Ol 02 03 04 205 JNexans BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES HIGHLIGHTS NEXANS. ELECTRIFY THE FUTURE For over 120 years, Nexans has Headquartered in France, Nexans brought energy to life by providing employs around 25,000 people with customerswith advanced cabling industrial footprin
Slide 29: Sales by geography and business segments
J\exans 02 03 04 505 NEXANS. ELECTRIFY THE FUTURE SALES BY GEOGRAPHY") SALES BY BUSINESS SEGMENTS OTHERS HIGH VOLTAGE & PROJECTS GROUP’S REVENUE WAS €5.7BN AT STANDARD METAL IN 2020 INDUSTRY & 21% SOLUTIONS BUILDING & TERRITORIES 029 iiebosedonsclesot standard metal prices, excloing Homes HIGH VOLTA
Slide 30: Four main business areas
JS\exans 01 02 03 04 >05 HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES NEXANS. ELECTRIFY THE FUTURE FOUR MAIN TELECOM SECTORS TA HIGH VOLTAGE & PROJECTS PRODUCTS: PRODUCTS: PRODUCTS: PRODUCTS: Low & Medium voltage cables & Specialty wires, power, control & data | Optical fibercable
Slide 31: Nexans turnkey EPCI model key project enabler
J\exans Ol 02 03 04 205 HIGHUGHTS BUSINESS OVERVIEW KEY FINANCIALS ouTLooK ‘APPENDICES NEXANS TURNKEY EPCI") MODEL KEY PROJECT ENABLER NNKEY EPC] MODEL TO MITIGATE PROJECT RISKS & OPTIMIZE RETURNS + Early engagement: FEED?! & + Worldwide footprint: 4 Purpose built vessels: * Inspection, Maintenance
Slide 32: Robust corporate governance and board practice
exans 01 02 03 04 HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ROBUST CORPORATE GOVERNANCE AND BOARD PRACTICE a ” JEANMOUTON Chairman MARC GRYNBERG Independent Director yl SYLVIE JEHANNO ANNE LEBEL Independent Director Lead Independent Director 032 4 Be JANE BASSON IndependentDirector FRANCIS
Slide 33: Experienced executive committee to lead the New Nexans
JS\exans 01 02 03 04 >05 HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES BUSINESS GROUP EXEC dn tik CHRISTOPHERGUERIN VINCENT DESSALE RAGNHILDKATTELAND ‘\VUAY MAHADEVAN JULIEN HUEBER EXPERIENCED EXECUTIVE COMMITTEE TO LEAD THE NEW NEXANS Chief Executive Officer COO and Senior Executi
Slide 34: WASH Pledge
WASH Pledge On-going On-going
Slide 35: The Nexans three pillars for a sustainable future
J\exans Ol 02 03 O04 ?05 HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES THE NEXANS THREE PILLARS FOR A SUSTAINABLE FUTURE OPLE Looking after our people and building a diverse and inclusive workplace forall kK NCAPITAL pvt | msc | mae | Werglce | Soviy Graded | Womenin | Woraninon |
Slide 36: Sales at standard metal price and profitability by segment
J\exans Ol HIGHLIGHTS 02 BUSINESS OVERVIEW 03 KEY FINANCIALS O04 OUTLOOK ?05 ‘APPENDICES SALES AT STANDARD METAL PRICE AND PROFITABILITY BY SEGMENT H1 2020 H1 2021 In million euros Sales EBITDA —_EBITDA% OM OM% Sales EBITDA —_ EBITDA% OM OM% Building & Territories 1,233 58 47% 33 2.7% 1,277 90 7.0%
Slide 37: Impact of foreign exchange and consolidation scope
01 02 03 04 ?05 exans HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK APPENDICES IMPACT OF FOREIGN EXCHANGE AND CONSOLIDATIONSCOPE es Organic Sales at standard metal prices,in €m H1 2020 FX Growth Scope H1 2021 Building & Territories 1,233 (26) 64 6 1,277 Industry & Solutions 598 (5) 110 (6) 697
Slide 38: Strong increase in ROCE at 14.2%
J\exans Ol 02 03 04 205 HIGHUGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES STRONG INCREASE IN ROCE AT 14.2% ROCE 12 MONTH EVOLUTIO! 2.6% eA 14.2% Ee (0.4%) Scope Operating Capital ROCE FX i p ROCE JUNE 2020 Margin Employed JUNE 2021 HI 20 lexans Earnings 038 1:2 monhsoperting Margin onen
Slide 39: Balance sheet as of June 30, 2021
JS\exans 01 02 03 O04 >05 HIGHUGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK APPENDICES BALANCE SHEET AS OF In €m DEC. 2020 JUN. 2021 JUNE 30, 2021 Fixed assets and other non-currentassets 1,827 1,867 of which: goodwill 232 236 Deferred tax assets 115 100 NON-CURRENT ASSETS 1,942 1,967 Working Capit
Slide 40: High-Voltage & Projects: project pipeline
JS\exans 01 02 03 04 >05 HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES HIGH-VOLTAGE & PROJECTS: PROJECT PIPELINE OFFSHORE WIND AND INTERCONNECTION PROJECTS . . Capacity Fully , Capacity Installation date Project AC/DC Country (Mw) ‘Commissioned Project Countries (ww) 2024-2025 Empi
Slide 41: High Voltage & Projects contract wins
01 02 03 J\exans O04 ?05 HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES NEXANS. ELECTRIFY THE FUTURE HIGH VOLTAGE & PROJECTS NEXANS WINS PREFERRED SUPPLIER AGREEMENT ON EMPIRE WIND PROJECT Nexans has signed a preferred supplier ‘agreement (PSA) with Empire Offshore Wind LLC to elect
Slide 42: Industry & Solutions contract wins
J\exans Ol 02 03 O04 ?05 HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES NEXANS. ELECTRIFY THE FUTURE INDUSTRY & SOLUTIONS NEXANS WINS FIRST CONTRACT FOR THE GRAND PARIS EXPRESS TO SUPPLY TRACTION CABLES FOR METRO LINE 15 SOUTH Nexans has been awarded its first over threeyear tractio
Slide 43: Partnerships to move up the value chain
01 HIGHLIGHTS 02 BUSINESS OVERVIEW J\lexans 03 KEY FINANCIALS 04 OUTLOOK ?05 ‘APPENDICES NEXANS. ELECTRIFY THE FUTURE 5 RISK MANAGEMENT, INNOVATION & DIGITALIZATION PARTNERSHIPS TO MOVE-UP THE VALUE CHAIN HE Microsoft pusiess Services Reduce risk and promote best Electrify the future through : Conne