9M 2023 PAVING THE WAY FOR ROBUST PERFORMANCE - 2023 GUIDANCE
CONFIRMED
9M 2023 PAVING THE WAY FOR ROBUST
PERFORMANCE
2023 GUIDANCE
CONFIRMED
_PRESS
RELEASE_
- Standard sales of 4,921
million euros in the first nine months of 2023, +3.4% organically
year-on-year excluding Other Activities
- Generation &
Transmission upturn, up +17.8% organically in the third quarter of
2023
- Strategic investment in a
third cable-laying vessel to address robust demand; Halden plant
expansion progressing well
- Distribution & Usage
reaping rewards of structural improvements as a result of SHIFT and
Amplify transformation platforms
- 2023
guidance confirmed
- EBITDA between 610 and 650 million
euros
- Normalized Free Cash Flow of
between 220 and 300 million euros
- Canada and France
metallurgy facilities awarded the Copper Mark label for responsible
copper production
~ ~ ~
Paris, October
25th, 2023 – Today,
Nexans announced its financial information for the third quarter of
2023. Commenting on the Group’s highlights, Christopher Guérin,
Nexans’ Chief Executive Officer, said: “In the face of geopolitical
and economic uncertainty, we are committed to maintaining and
improving our performance and we confirm our full-year guidance,
which we upgraded last July.
In the third quarter, Generation &
Transmission segment grew organically by +17.8%, marked by an
upturn in our Charleston unit, which is now fully ramped up. In
order to bolster our installation capabilities, we have decided to
invest in a new ultra-modern, technologically advanced,
cable-laying vessel, expected to be operational by 2026. In the
meantime, the Halden plant's expansion in Norway is on-track for
completion in early 2024.
Distribution, up +2.9% organically compared to
the first nine months of 2022, benefitted from growing investments
in renewable energy projects and expanding investments in power
grids to support urbanization and renovation trends, particularly
in Europe and North America.
Usage sales amounted to 1,286 million euros,
down -6.1% organically compared with the first nine months of 2022
reflecting the anticipated normalization in North America, while
Non-electrification sales were up +17.7% in the first nine months
of the year, supported by continued momentum in Automation, Mining,
and Automotive Harnesses.”
CONSOLIDATED SALES BY SEGMENT
(in millions of euros) At standard metal prices
Copper reference at €5,000/t |
9M 20221 |
9M 2023 |
|
Organic growth 9M 2023 vs.
9M 2022 |
Organic growth Q3 2023 vs. Q3 2022 |
Electrification |
2,913 |
2,768 |
|
-2.6% |
-2.7% |
Generation & Transmission |
676 |
593 |
|
-2.1% |
+17.8% |
Distribution |
834 |
889 |
|
+2.9% |
+0.0% |
Usage |
1,403 |
1,286 |
|
-6.1% |
-12.6% |
Non-electrification (Industry &
Solutions) |
1,163 |
1,352 |
|
+17.7% |
+13.1% |
Total excl. Other Activities |
4,077 |
4,120 |
|
+3.4% |
+2.1% |
Other Activities |
968 |
800 |
|
-15.5% |
-6.0% |
Total Group |
5,044 |
4,921 |
|
-0.2% |
+0.8% |
I. 9M AND Q3 2023
HIGHLIGHTS
In the first nine months of 2023, sales at
standard metal prices amounted to 4,921 million euros, down -0.2%
organically compared to the same period of 2022 and up +3.4%
excluding Other Activities. The third quarter 2023 sales at
standard metal prices amounted to 1,599 million euros, up +0.8%
organically and up +2.1% excluding Other Activities compared to the
third quarter of 2022.
-
Electrification sales were down -2.6% organically
in the first nine months reflecting the continued value growth
focus in the Distribution and Usage segments, and a reduced
contribution from the Generation & Transmission segment in the
first half of the year due to a lower contribution from Umbilicals
following the Group’s strategic decision to exit the business and
the delayed ramp-up of the Charleston plant in the U.S. The third
quarter marked an upturn for the Generation & Transmission
segment with an improved situation in Charleston plant, which is
now fully ramped up.
-
Non-electrification (Industry & Solutions)
sales were up +17.7% in the first nine months of the year,
supported by continued momentum in Automation, Mining, and
Automotive Harnesses.
-
Within the Other Activities segment, the ongoing
downsizing of the Metallurgy business is in line with the Group’s
strategy to prioritize tolling and reduce external sales.
Across all units, Nexans’ transformation
platform (SHIFT Performance, SHIFT Prime and Amplify programs) is
running at full speed to deliver sustainable results and equip the
units to be recession-proof.
Driving sustainability
To achieve its net-zero emissions goal by 2050,
Nexans has launched a series of groundbreaking initiatives. In
particular, Nexans’ metallurgy facilities in Canada and France,
have been honored with the Copper Mark label for their commitment
to responsible copper production. This prestigious recognition is a
testament to Nexans’ dedication to sustainable development and
bolsters a comprehensive insurance program encompassing both the
social and environmental aspects of copper rod production.
In Turkey, Nexans has unveiled a solar power
installation on the roof of its Denizli plant, effectively reducing
the plant’s annual greenhouse gas emissions by 600 tCO2e. This
remarkable undertaking is in perfect harmony with Nexans’ E3
strategy, which combines Economy, Environment, and Engagement, and
promotes Company-wide sustainable practices.
II. 9M 2023 SALES PER
BUSINESS GROUP
| GENERATION &
TRANSMISSION: Robust upturn in Q3
Generation & Transmission
sales came in at 593 million euros in the first nine months of
2023, down - 2.1% compared to the first nine months of 2022
due to the strategic decision to exit the Umbilicals activity. In
the third quarter of 2023, sales were up +17.8% organically
compared to the third quarter of 2022, reflecting a reduced impact
of the exit of the Umbilicals activity, the completion of the
Charleston plant ramp-up in the U.S, which is now fully
operational, and the ongoing execution of projects. During
third-quarter 2023, progress was made mainly on the Revolution Wind
and Moray West offshore wind projects.
The adjusted backlog stood at a 5.2 billion
euros at the end of September 2023, up +115% compared to September
2022. The Halden plant in Norway, the Charleston plant in the
United States and Nexans’ two cable-laying vessels have visibility
up to 2030.
In order to bolster its installation capacities,
Nexans has decided to invest in a new ultra-modern, technologically
advanced, cable-laying vessel. This advanced vessel will be
equipped with a state-of-the-art logistics and handling system
capable of laying four cables simultaneously and is expected to be
operational by 2026. In the meantime, the Halden plant's expansion
in Norway is on-track for completion in early 2024.
| DISTRIBUTION: Secular
trends fueling momentum
Distribution sales amounted to
889 million euros at standard metal prices in the first nine months
of 2023, up +2.9% organically, compared to the first nine months of
2022. The segment benefitted from expanding investments in power
grids to support urbanization and renovation trends, particularly
in Europe and North America, and new frame-agreements with
increased volumes and improved margins.
In line with its net-zero commitment by 2050,
the Group launched the first low-carbon power grid cable offering.
Through a comprehensive approach across the entire value chain and
cable lifecycle, Nexans reduces greenhouse gas emissions for its
cables by 35% to 50% thanks to the use of low-carbon aluminum,
recycled plastic, and renewable or decarbonized energy sources in
the cable manufacturing process.
Trends by geography for the first nine months
were as follows:
-
Europe benefitted from contract renewals and
demand from utilities to enhance grid infrastructure.
-
South America was slowed by the timing of
orders.
-
Asia Pacific suffered from lower demand in New
Zealand and Australia.
-
North America was propelled by enduring momentum
and the signature of new contracts.
- Middle East
and Africa benefitted from the strong performance in
Turkey and the resilience of the Moroccan market.
| USAGE: Focusing on
structural
performance
Usage sales amounted to 1,286
million euros at standard metal prices in the first nine months of
2023, down -6.1% organically compared with the first nine months of
2022 reflecting the anticipated normalization in North America.
Third-quarter 2023 sales include the contribution from Reka Cables
in Finland acquired in April 2023.
In line with its value-growth strategy, the
Group continues to deploy structural growth initiatives and
improvement efforts. This approach is put into action through the
introduction of new prime solutions for its customers, in
particular the MOBIWAY POP drum kit packaging, launched in South
America during the third quarter.
Trends by geography for the first nine months of
2023 were as follows:
-
Europe remained resilient and the Reka Cables
integration progressed well.
-
South America was slowed by macroeconomic
conditions in Colombia, while the Centelsa integration progressed
ahead of schedule.
-
Asia Pacific was soft.
-
North America continued to slow down as
anticipated, normalizing after a period of high levels.
- Middle East
and Africa benefitted from the recovery in Turkey and the
resilience of the Moroccan market despite the earthquake affecting
the region in early September.
| NON-ELECTRIFICATION
(Industry & Solutions): Enduring performance
Industry & Solutions sales
came in at 1,352 million euros at standard metal prices in the
first nine months of 2023, representing an organic year-on-year
increase of +17.7%. Momentum remained solid across the board,
particularly in the Automotive Harnesses, Automation and Mining
sectors. Customer orders decreased substantially in Automation from
last year’s high level.
Automotive Harnesses was up by
a strong +21.2% organically in the first nine months of 2023,
supported by sound demand in Europe and market share gains in the
electric vehicle segment.
| OTHER ACTIVITIES:
Sales reduction in line with strategic initiative
The Other Activities segment
reported sales of 800 million euros at standard metal prices in the
first nine months of 2023, down -15.5% organically year-on-year.
Metallurgy sales decreased in line with the Group's strategic
initiative to reduce external sales. In third quarter 2023, this
decline was mitigated by strong demand and a favorable comparison
to the previous year. Telecom sales continued to decline.
III. SIGNIFICANT EVENTS
SINCE THE END OF SEPTEMBER
On October 9th
– Nexans extended the maturity of its 800 million euros
multi-currency Revolving Credit Facility agreement by one year,
from October 2027 to October 2028. The Group still has an option to
extend it for a further year.
IV. 2023
OUTLOOK
Nexans is committed to maintaining and improving
its performance, even in the face of geopolitical and economic
uncertainty. The Group will continue to prioritize value growth
over volume in its strategy, leveraging its transformation platform
to convert short-term growth into long-term structural growth,
while investing in the expanding Generation & Transmission
markets. Furthermore, Nexans is still in the early stages of its
premiumization journey, as it continues to develop value-added
systems and solutions to cater for the evolving needs of its
end-users.
Nexans confirms its financial outlook for
full-year 2023, as upgraded in July 2023, and expects, excluding
non-closed acquisitions and divestments, to achieve:
-
EBITDA of between 610 and 650 million euros;
-
Normalized Free Cash Flow of between 220 and 300 million
euros.
~ ~ ~
The third quarter 2023 press release and
presentation slides are available in the Investor Relations Results
section at Nexans - Financial results.
A conference call is scheduled today at 9:00
a.m. CET. Please find below the access details:
Webcast
https://channel.royalcast.com/landingpage/nexans/20231025_1/
Audio dial-in
- International
switchboard: +44 (0) 33 0551 0200
- France: +33 (0)
1 70 37 71 66
- United Kingdom:
+44 (0) 33 0551 0200
- United States:
+1 786 697 3501
Confirmation code: Nexans
~ ~ ~
Financial calendar
February 15th, 2024:
2023
full-year earnings
About Nexans
For over a century, Nexans has played a crucial
role in the electrification of the planet and is committed to
electrifying the future. With approximately 28,000 people in 42
countries, the Group is paving the way to a new world of safe,
sustainable and decarbonized electricity that is accessible to
everyone. In 2022, Nexans generated 6.7 billion euros in standard
sales. The Group is a leader in the design and manufacturing of
cable systems and services across four main business areas: Power
Generation & Transmission, Distribution, Usage and Industry
& Solutions. Nexans was the first company in its industry to
create a Foundation supporting sustainable initiatives, bringing
access to energy to disadvantaged communities worldwide. The Group
is recognized on the CDP Climate Change A List as a global leader
on climate action and has committed to Net-Zero emissions by 2050
aligned with the Science Based Targets initiative (SBTi).
Nexans. Electrify the Future.
Nexans is listed on Euronext Paris, compartment
A.For more information, please visit
www.nexans.com
Contacts:
Investor relations |
Communication |
Elodie Robbe-MouillotTel.: +33 (0)1 78 15 03
87elodie.robbe-mouillot@nexans.com |
Mael Evin (Havas Paris)Tel.: +33 (0)6 44 12 14
91mael.evin@havas.com |
NB: Any discrepancies are due to rounding
This press release 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 invited to visit the Group’s website
where they can view and download the 2023 half-year report and 2022
Universal Registration Document, which include a description of the
Group’s risk factors.
1 Pro forma sales at standard non-ferrous metal prices. The
detailed impact of changes is set out in the appendix to this press
release.
- Nexans_Third quarter 2023 Press release_Final
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