Nexans Sa · EURONEXT:NEX
Nexans Sa — FY2022 Earnings Presentation
52 slides from Nexans Sa's earnings presentation, Feb 15, 2023
Slide 1: 2022 Full-Year Earnings
J\lexa ns ELECTRIFY THE FUTURE 2022 FULL-YEAR EARNINGS FY 2022 ’ CHRISTOPHER GUERIN, CEO JEAN-CHRISTOPHE JUILLARD, DEP!
Slide 2: Safe Harbour
Ol HIGHLIGHTS 02 BUSINESS OVERVIEW 03 KEY FINANCIALS O04 OUTLOOK O5 ‘APPENDICES J\exans SAFE HARBOUR This presentation contains forwardlooking statements which are subject to various expected or unexpected risks and uncertainties that could have a material impact on the Company's future performance.
Slide 3: Nexans value proposition supported by accelerating market trends
J\exans 01 02 03 O04 05 NEXANS VALUE PROPOSITION SUPPORTED BY ACCELERATING MARKET TRENDS OUR OUR f OUR OUR PURPOSE : STRATEGY : ASPIRATION PROMISE WE ELECTRIFY THE FUTURE : ELECTRIFICATION : SIMPLIFY TO AMPLIFY SCALE-UP TO STEP-UP ; PURE PLAYER : Grow in value rather than Deliver benchmark results a
Slide 4: Highlights
01 HIGHLIGHTS 02 BUSINESS OVERVIEW 03 KEY FINANCIALS 04 OUTLOOK 05 ‘APPENDICES J\Jexans HIGHUGHTS FY 2022 Earnings
Slide 5: 2022 Highlights
J\exans 02 BUSINESS OVERVIEW 301 HIGHLIGHTS 03 KEY FINANCIALS O04 OUTLOOK O5 ‘APPENDICES 2022 HIGHLIGHTS RECORD YEAR CONTINUED #0)| WITH STRONG #()) DEPLOYMENT OF #03 Or cUSTARUBITTY PROFITABLE GROWTH STRATEGIC ROADMAP All-time high EBITDA, Normalized FCF Announced one new acquisition in Accelerated
Slide 6: 2021-2022: From Strategy to Execution
JNexans 30] 02 03 O04 O5 HIGHUGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK. ‘APPENDICES 2021-2022: FROM STRATEGY TO EXECUTION MAJOR STEPS IN ELECTRIFICATION FEB JUN Nov APR JUN Nov DEC Nexans to become an Naming ceremony for Charleston U.S. subsea Completion of Inauguration of Agreement to Photovol
Slide 7: All-Time High Financial Performance
02 BUSINESS OVERVIEW 301 HIGHLIGHTS 03 KEY FINANCIALS O04 OUTLOOK O5 ‘APPENDICES J\exans ALL-TIME HIGH FINANCIAL PERFORMANCE EBITDA TARGET FULLY MET, CASH GENERATION EXCEEDING GUIDANCE EBITDA (€M) & - NORMALIZED FREE CASH FLOWS) (€M) . ROCE') (%) EBITDA MARGIN") (%) / & NCCR4) (%) ; ELECTRIFICATION,
Slide 8: Two New Transactions Announced
301 J\exans 02 03 O04 O5 HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES DEPLOYING NEXANS’ ELECTRIFICATION PURE PLAYER ROADMAP TWO NEW TRANSACTIONS ANNOUNCED AGREEMENT TO ACQUIRE REKA CABLES IN THE NORDICS Pee, “N + One of the leaders in Nordics countries + Enlarge and strengthen Nex
Slide 9: SHIFT Programs Implementation
JNexans 301 02 03 O04 O5 HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES SHIFT PROGRAMS IMPLEMENTATION ELECTRIFICATION. @e@@o@ HIGH POTENTIAL FOR FURTHER STRUCTURAL VALUE CREATION ELECTRIFICATION BUSINESS PORTFOLIO CLUSTERING 2.0 % of Electrification businesses 2022 standard sales In
Slide 10: From Innovation to Value Creation: SHIFT Prime
JNexans 02 BUSINESS OVERVIEW 301 HIGHLIGHTS 03 KEY FINANCIALS O04 OUTLOOK O5 ‘APPENDICES ELECTRIFICATION. shi; FROM INNOVATION TO VALUE CREATION ee@eo aa SHIFT PRIME OUTPERFORMING INITIAL TARGETS SHIFT PRIME PROGRAM DEPLOYEMENT SHIFT PRIME 2022 RESULTS Electrification units PERFORMANCE is EXPECTED I
Slide 11: Accelerated Decarbonation Journey
301 HIGHLIGHTS SNexans 02 03 04 05 BUSINESS OVERVIEW KEY FINANCIALS ‘ouTtook [APPENDICES ACCELERATED DECARBONATION JOURNEY GHG EMISSIONS REDUCTION AHEAD OF SBTi TARGETS GHG EMISSIONS REDUCTION LEVERS CARBON FOOTPRINT REDUCTION Accelerate efficiency audits and digitalization to fasten Group Scopes 1,
Slide 12: Combining Financial Performance & Environmental Impact
JSNexans >01 02 03 04 05 HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK APPENDICES: ELECTRIFICATION COMBINING FINANCIAL PERFORMANCE & ENVIRONMENTALIMPACT @@@@ A DISRUPTIVE APPROACH TO PERFORMANCE SCORING OF UNIT ENVIRONMENTAL (GHG) PERFORMANCE COMBINE ENVIRONMENTAL IMPACT Electrification units
Slide 13: Highlights
01 HIGHLIGHTS 02 BUSINESS OVERVIEW 03 KEY FINANCIALS 04 OUTLOOK 05 ‘APPENDICES J\Jexans FY 2022 Eomings
Slide 14: Continued Profitable Growth in Electrification Businesses
J\exans Ol HIGHLIGHTS 202 BUSINESS OVERVIEW 03 KEY FINANCIALS O04 OUTLOOK O5 ‘APPENDICES CONTINUED PROFITABLE GROWTH IN ELECTRIFICATION BUSINESSES +4.9% ORGANIC SALES GROWTH IN Q4 2022 GROUP ELECTRIFICATION BUSINESSES®) NON-ELECTRIFICATION BUSINESSES) OTHER ACTIVITIES (MAINLY METALLURGY) %l) 3 46.3)
Slide 15: Generation & Transmission
Ol J\exans 202 03 O04 O5 HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES GENERATION & TRANSMISSION (FORMERLY HIGH VOLTAGE & PROJECTS) STRONG ORDER INTAKE MOMENTUM IN SUBSEA Sales growth supported by robust execution, contribution of Charleston plant in the U.S. and Nexans Aurora new
Slide 16: Strengthening Our Strategic Position: Halden, Norway
03 KEY FINANCIALS O04 OUTLOOK 05 ‘APPENDICES J\exans STRENGTHENING OUR STI HALDEN, NORWAY Adding 2 new lines for HVDC cables manufacturing Delivery: early 2024 Projects: 1 * Celtic, the longest extruded x Interconnector = + Borwin 6, the longest offshore wind connection by TenneT FY 2022 Eorings
Slide 17: Distribution
J\lexans Ol >02 03 oA 05 DISTRIBUTION (FORMERLY TERRITORIES) PROFITABLE GROWTH SUPPORTED BY & 8 THE GRID RENEWAL Elle pee Sales growth driven by robust demand in all geographies, a g especially in North America, and from new contracts awarded in Europe. Transformation initiatives driving strong EBIT
Slide 18: Usages
Ol J\exans 202 03 O04 O5 HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS USAGES ELECTRIFICATION OUTLOOK ‘APPENDICES (FORMERLY BUILDING) RECORD EBITDA MARGIN Value-driven sales generation benefitting from continued demand across geographies. Margin up +390 bps YoY to highest level in history, positively
Slide 19: Industry & Solutions and Telecom & Data
J\exans Ol 202 03 O04 O5 INDUSTRY & SOLUTIONS PROFITABILITY STEP-UP AITOMATON ATOMS HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES _ TELECOM & DATA _ IN LINE WITH 2021 PERFORMANCE LAN CABLES AND SYSTEMS ‘TELECOM INFRASTRUCTURE ‘SPECIAL TELECOM (SUBSEA) rong pertarmonce Feicimtner ia
Slide 20: Financials
01 HIGHLIGHTS 02 BUSINESS OVERVIEW 03 KEY FINANCIALS 04 OUTLOOK 05 ‘APPENDICES J\Jexans FINANCIALS FY 2022 Eomings
Slide 21: Group Results Summary
Organic growth +8.3% +6.3% EBITDA margin (%) (1) 7.6% 8.9% Operating margin (% ) (1) 4.9% 6.2%
Slide 22: Amplify Electrification Businesses: EBITDA Step-Up
JSNexans 01 02 >03 04 05 AMPLIFY ELECTRIFICATION BUSINESSES @ @ @ © +39% EBITDA STEP-UP IN LINE WITH FINANCIAL TRAJECTORY EBITDA EVOLUTION (€M) - ELECTRIFICATION BUSINESSES | +39% 61 38 ee 327 40 as oe Cl (22) 2021 ities (pel AMPLIFY SHIFT nas vol Conjunctrel 2022 industrial & FX oe performance] £20
Slide 23: Strong Operational Performance: Net Debt Evolution
JSNexans 01 02 303 04 05 HIGHUGHTS- BUSINESS OVERVIEW KEY FINANCIALS: OUTLOOK APPENDICES: STRONG OPERATIONAL PERFORMANCE BEFORE CENTELSA ACQUISITION AND EQUITY OPERATIONS NET DEBT LAST 12 MONTHS EVOLUTION (€M) 152 leverage MCE [| 59) 0.2x!1) 0.4x(1) FCF GENERATION 73 — excl. M&A || €271m (298) (C3)
Slide 24: Robust Balance Sheet
J\exans Ol 02 >03 O04 O5 ROBUST BALANCE SHEET HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES g < a § 8 5 i] a In millioneuros DEC 2021 DEC 2022 Fixed assets 1,942 2,271 Other non-current assets 112 122 Non-currentassets 2,053 2,393 Working Capital 77 27 Total to finance 2,130 2,420
Slide 25: High Liquidity Level Further Reinforced
SNexans 01 02 303 04 05 HIGHUGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK APPENDICES: HIGH LIQUIDITY LEVEL FURTHER REINFORCED BY A NEW RCF!) AND A BACK-UP FACILITY LINE LIQUIDITY AND DEBT REDEMPTION SCHEDULE (€M) In million euros DEC 21 DEC 22 TOTAL AVAILABLE GROSS DEBT UQUIDITY Gross debt 1,046 1,
Slide 26: Outlook
01 HIGHLIGHTS 02 BUSINESS OVERVIEW 03 KEY FINANCIALS 04 OUTLOOK 05 ‘APPENDICES J\Jexans FY 2022 Eomings
Slide 27: 2023 Guidance
J\exans Ol HIGHLIGHTS 02 BUSINESS OVERVIEW 03 KEY FINANCIALS 304 OUTLOOK O5 ‘APPENDICES 2023 GUIDANCE OVERALL GROUP (EXCLUDING NON-CLOSED ACQUISITIONS AND DIVESTMENTS) EBITDA NORMALIZED FREE CASH FLOW") BETWEEN €570M AND €630M BETWEEN €150M AND €250M PROPOSED DIVIDEND AT MAY 11™ AGM €2.10 PER SHARE
Slide 28: Transformation Platform Powering Performance & Resilience
JSNexans Ol 02 03 >04 05 TRANSFORMATION PLATFORM POWERING PERFORMANCE & RESILIENCE TURNING CONJUNCTURAL INTO STRUCTURAL Leadership in Electrification Large untapped potential 570430 markets beyond the core with longterm, secular growth in Digital and Services opportunities LEVERS + SHIFT programs an
Slide 29: Amplification of the Electrification Hyper-Cycle (2020-2040)
Ol HIGHLIGHTS 02 BUSINESS OVERVIEW J\lexans 03 KEY FINANCIALS S04 OUTLOOK O5 ‘APPENDICES AMPLIFICATION OF THE ELECTRIFICATION HYPER-CYCLE (2020-2040) CABLE MARKET 2019-2030 HISTORICAL MARKET TRENDS VS. 2021 FORECASTS NEXANS OBJECTIVES & RESULTS FORECASTS!) GENERATION — Countries massively investing
Slide 30: Appendices
01 HIGHLIGHTS 02 BUSINESS OVERVIEW 03 KEY FINANCIALS 04 OUTLOOK 05 ‘APPENDICES J\Jexans APPENDICES FY 2022 Eomings
Slide 31: Financials: Segment and Geographies
JNexans Ol HIGHLIGHTS 02 BUSINESS OVERVIEW 03 KEY FINANCIALS O04 OUTLOOK > 05 ‘APPENDICES FINANCIALS SEGMENT AND GEOGRAPHIES FY 2022 SALES & EBITDA BY BUSINESS SEGMENTS FY 2022 SALES BY GEOGRAPHY") % based on sales at standard metal price and EBITDA, excluding Other activities GENERATION & ] RY TRAN
Slide 32: Balancing Cost Inflation Through Cost Pass Through and Hedging
J\exans Ol 03 > 05 FINANCIALS HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES BALANCING COST INFLATION THANKS TO COST PASS THROUGH AND HEDGING SUPPLY CHAIN AND RAW INFLATION & SHORTAGE MITIGATION MATERIAL IMPACTS EMBEDDED IN OUR OPERATIONS VARIABLE DIRECT COSTS" COST PASS THROUGH FUL
Slide 33: Sales at Standard Metal Price and Profitability by Segment
Ol HIGHLIGHTS 02 BUSINESS OVERVIEW > 05 ‘APPENDICES J\exans 03 KEY FINANCIALS O04 OUTLOOK FINANCIALS SALES AT STANDARD METAL PRICE AND PROFITABILITY BY SEGMENT 2021 AT CONSTANT SCOPE 2022 In million euros Sales!) ae EBITDA _EBITDA% Sales!!! oor EBITDA _EBITDA% Carneetitem @ernenftssten 796 49.3% 143
Slide 34: Impact of Foreign Exchange and Consolidation Scope
J\fexans 01 02 03 04 >05 HIGHUGHTS BUSINESS OVERVIEW KEY FINANCIALS ouTLOoK [APPENDICES FINANCIALS IMPACT OF FOREIGN EXCHANGE AND CONSOLIDATION SCOPE 2021 9 Sales at standard metal prices, in €m published escape a mae can a Generation & Transmission (High Voltage & Projects) 796 796 4 97 897 Distrib
Slide 35: Net asset impairment and gains on disposals
Of which: net asset impairment (15) 0 Of which: net gains on assets disposals 15 54
Slide 36: From Operating Margin to Normalized Net Income
J\fexans 01 02 03 04 205 HIGHUGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK APPENDICES FINANCIALS FROM OPERATING MARGIN TO NORMALIZED NET INCOME In million euros 2022 OPERATING MARGIN 420 Cost of debt (net) (35) Other financial income and expense restated (26) Income tax (incl. impact from normaliza
Slide 37: Free Cash Flow to Normalized Free Cash Flow
J\fexans 01 02 03 04 205 FINANCIALS FREE CASH FLOW TO NORMALIZED FREE CASH FLOW In million euros DEC 2020 DEC 2021 DEC 2022 FREE CASH FLOW 157 179 271 Strategic capex 131 81 157 PPE divestment (16) (14) (60) Normative project tax cash out (7) (19) 25 Restated 2019 European plan 11 NORMALIZED FREE CA
Slide 38: Sustained Return to Shareholders & Progressive Dividend Policy
J\exans Ol HIGHLIGHTS 02 BUSINESS OVERVIEW 03 KEY FINANCIALS O04 OUTLOOK > 05 ‘APPENDICES FINANCIALS SUSTAINED RETURN TO SHAREHOLDERS & PROGRESSIVE DIVIDEND POLICY DIVIDEND/SHARE (€) DIVIDEND YIELD?) 9 36% 75%) ae Dividend payout ratio!) 2.10 1.6% 1.6% 1.20 0.9% 0.70 0.30 2018 2019 2020 2021 2022 20
Slide 39: Dec Jan Feb
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Spe Oct Nov Dec
Slide 40: of which: goodwill of which: - restructuring provision
of which: goodwill 329 289 of which: - restructuring provision 30 25 - pension & jubilees reserves 249 232
Slide 41: Appendices
01 HIGHLIGHTS 02 BUSINESS OVERVIEW 03 KEY FINANCIALS 04 OUTLOOK 05 ‘APPENDICES J\Jexans APPENDICES FY 2022 Eomings
Slide 42: Strong Value Creation Since 2019
J\exans Ol 02 03 04 > 05 HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES STRONG VALUE CREATION SINCE 2019 WITH SOLID OPPORTUNITIES AHEAD FINANCIAL SHAREHOLDER OPERATIONAL PERFORMANCE RETURN EXCELLENCE | mone | SUSTAINABILITY ACCELERATE ii: P| 1012% >40% 220% >20% reucoras | SPM E TAR
Slide 43: Becoming an Electrification Pure Player
JSNexans Ol 02 03 04 >05 HIGHUGHTS BUSINESS OVERVIEW KEY FINANCIALS: OUTLOOK APPENDICES BECOMING AN ELECTRIFICATION PURE PLAYER COVERING THE VALUE CHAIN CENTRALISED TRANSMISSION DISTRIBUTION USAGES GENERATION, SUBSEA AND LAND — Onshore and offshore wind — Subsea and land = Centralized grid — Residen
Slide 44: Generation & Transmission Project Pipeline
Ol HIGHLIGHTS 02 BUSINESS OVERVIEW > 05 ‘APPENDICES J\exans GENERATION & TRANSMISSION €20*Bn PROJECT PIPELINE OFFSHORE WIND AND INTERCONNECTION PROJECTS 03 KEY FINANCIALS O04 OUTLOOK SELECTION OF FUTURE SUBSEA OFFSHORE WIND PROJECTS SELECTION OF FUTURE SUBSEA INTERCONNECTION PROJECTS Installation da
Slide 45: Risk Management
J\lexans 01 02 03 O04 HIGHUGHTS BUSINESS OVERVIEW KEY FINANCIALS: OUTLOOK RISK MANAGEMENT SS MODELIZE RISKS TO PRICE RISK ATITS. [iE j CHARLESTON, USA: — NEXANS AURORA FAIR VALUE & MAXIMIZE YIELD 2 as HALDEN, NORWAY: FUTTSU, JAPAN: SACI A PARTNERSHIP Ti IG RISK . MANAGEMENT A STEP FURTHER CHARLEROI,
Slide 46: Copper Demand
J\exans Ol HIGHLIGHTS 02 BUSINESS OVERVIEW 03 KEY FINANCIALS O04 OUTLOOK > 05 ‘APPENDICES COPPER DEMAND LEVERAGE NEXANS’ UNIQUE OPERATIONAL MODEL TO COPE WITH SCARCITY COPPER DEMAND TO OUTSTRIP SUPPLY BY 2024 In million metric tons a hon 35 wat EUROPE, A aN A AMERICA AND SOUTH AMERICA 27 c. = 23 99
Slide 47: Robust Corporate Governance and Board Practices
SEnE 01 02 03 04 > 05 HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS ‘OUTLOOK ‘APPENDICES GOVERNANCE ROBUST CORPORATE GOVERNANCE AND BOARD PRACTICES © 2\¢ ‘vr an 2 NI JEANMOUTON ANNE LEBEL JANEBASSON LAURA BERNARDELLI =MARCGRYNBERG ‘SYLVIE JEHANNO- HUBERT PORTE Chairman lead Independent Independent Dir
Slide 48: Experienced and Diversified Executive Committee
J\exans Ol HIGHLIGHTS ia a> CHRISTOPHERGUERIN JEAN-CHRISTOPHE Chief Executive Officer JUILLARI 02 BUSINESS OVERVIEW 03 KEY FINANCIALS O04 OUTLOOK > 05 ‘APPENDICES GOVERNANCE EXPERIENCED AND DIVERSIFIED EXECUTIVE COMMITTEE TO LEAD NEXANS JULIEN HUEBER RAGNHILD KATTELAND- EYZAGUIRRE Exe Executive Vice
Slide 49: Sustainability: Licence to Operate
JNexans Ol HIGHLIGHTS 02 BUSINESS OVERVIEW 03 KEY FINANCIALS O04 OUTLOOK > 05 ‘APPENDICES SUSTAINABILITY ES LICENCE TO OPERATE Se
Slide 50: The Nexans Three Pillars for a Sustainable Future
J\exans Ol 02 03 O04 > 05 SUSTAINABILITY HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES THE NEXANS THREE PILLARS FOR A SUSTAINABLE FUTURE PEOPLE Looking after our people and building a diverse and inclusive workplace forall Sey Wensnin | Wonaninop | Employes site Se | pootans” | pou
Slide 51: Our Commitments and Extra-Financial Ratings
J\exans SUSTAINABILITY OUR COMMITMENTS JNexans FOUNDATION RE EW) THE COPPER MARK RESPONSIBLY PRODUCED COPPER 01 03 >05 PROGRESSES RECOGNIZED BY EXTRA-FINANCIAL AGENCIES EXTRA-FINANCIAL RATINGS, 2022 ser = GE - GOALS _ x FREnen gusts cna pLeoge ecovadis ° 2021 @ 2022 QD sustaaurnics 100 - ~ \ SCIENCE
Slide 52: Scope 3 Use of Sold Products: Updated Methodology
J\exans Ol 02 03 04 205 SUSTAINABILITY SCOPE 3 USE UPDATED METHODOLOGY HIGHLIGHTS BUSINESS OVERVIEW KEY FINANCIALS OUTLOOK ‘APPENDICES SCOPE 3 USE OF SOLD PRODUCTS In million tons of GHG 167 102 89 052 2021 2021 lUimettedeloayiim New methodology 2022 Main contributor of the scope 3 is the use of cab