Nexans Sa · EURONEXT:NEX
Nexans Sa — FY2009 Earnings Presentation
42 slides from Nexans Sa's earnings presentation, Feb 10, 2010
Slide 1: 2009 Full Year Results
2009 Full Year Results February 10th, 2010
Slide 2: Safe Harbor
2009 Full Year Results 2 Safe Harbor This presentation contains forward-looking statements relating (3) the recovery of sales volumes in the other businesses; to the Group’s expectations for future financial performance, including sales and profitability. (4) maintaining margins despite weakened dem
Slide 3: 2009: Nexans proves its ability to withstand during a crisis
2009 Full Year Results 3 2009 : Nexans proves p its ability to withstand during a crisis Frédéric Vincent Chairman and CEO
Slide 4: 2009, a far more difficult than expected outlook
2009 Full Year Results 4 2009, a far more difficult than expected outlook outlook, (-17.2 % cables activities) but : • Operating margin : 6% • Net income at breakeven • R Recurring i nett income i : 103 M€(*) • Net debt : 141 M€ Confidence in the model : proposed dividend 1 €/share(**) (*) Excluding
Slide 5: 2009: an economic outlook more difficult than expected
2009 Full Year Results 5 2009 : an economic outlook more difficult than expected in M€ 2008 Δ 2009 (Initital expectation) Δ 2009 (Actual) Cables : Sales - 17.2% vs -5%/-7% (constant 4,675 4,400 3,711 consolidation scope) expected Sales Madeco+Intercond 101 ~360 315 Sales 4,776 4,760 4,026 MVC in % 3
Slide 6: 2009: Strong core business
2009 Full Year Results 6 2009 : Strong S core business Operating margin rate 2008 H1 2009 H2 2009 2009 Energy Infrastructure 11.7% 9.3% 10.6% 10.0% Industry 7.0% 1.0% 0.6% 0.7% Building 10.4% 6.2% 4.2% 5.3% Telecom Infrastructure 4.6% 6.3% 11.3% 8.7% Private networks (LAN) 10.6% 0.0% 5.6% 2.9% T t l
Slide 7: Energy infrastructure: basis of the Group's results
2009 Full Year Results 7 Energy gy infrastructure : basis of the Group’s p results ¾ Double-digit profitability and stable order backlog Low (~1.5 year) & Medium ¾ Potention for growth Voltage ¾ Outstanding O t t di commercial i l High confirmed Emerging successes : BP, London voltage Countries Arra
Slide 8: Industry: Transportation holding up well and weak industrial capex
2009 Full Year Results 8 Industryy : Transportation p holding-up g p well ((excludingg automotive)) and weak industrial capex Sales at constant metal p prices Autres Othersecteurs industriels industrial segments - 28 % Manutention/Automatismes Handling / Automation - 47 % Automobile Automotive - 29
Slide 9: Building: margin holding up well
2009 Full Year Results 9 Building g : margin g holding g up p well Restructuring and In a tough Price / Volumes market arbitration Margin protection OM = 6.2% 6 2% OM = 4.2% Sales stabilization excluding restructuring((*)) Sales in M€ 454 454 Q109 Q209 Q309 Q409 (at constant 384 384 metal prices) -2
Slide 10: LAN: an example of the Group's responsiveness
2009 Full Year Results 10 LAN : an example p of the Group’s p responsiveness p Sales Sales, fixed costs and operating margin in % 149 141 -26.3% org. 10% 11% -19.4% org. 113 108 -16%(*) 6% 0% S1 H1 08 08 S2 08 H2 08 S1 09 H1 S2 09 H2 09 Operating margin rate Fixed costs in M€ Sales at constant metal
Slide 11: Telecom infrastructure: relevant strategic choices
2009 Full Year Results 11 Telecom infrastructure : relevant strategic g choices … Copper cables : strategy focused on niche segments in a context of stable volumes (operating margin > 7%) Fiber cables : profitability maintained despite projects being delayed positive outlook through the JV Nexans -
Slide 12: Financial results
2009 Full Year Results 12 Financial results Frédéric Michelland CFO, Senior Corporate Executive VP
Slide 13: Key Figures
2009 Full Year Results 13 Keyy Figures g (in Million €) 2008 2009 Sales 6,799 5,045 At current metal p prices Sales 4,776 4,026 -17.2 % at constant metal prices and exchange rates Cable activities EBITDA (*) 533 363 EBITDA margin rate 11.2 % 9.0 % O Operating ti margin i 427 241 Operating margin rat
Slide 14: Income Statement (1/2)
2009 Full Year Results 14 Income Statement ((1/2)) in Million € 2008 2009 Sales 4,776 4,026 at constant metal prices and exchange rates Margin on variable costs 1,527 32% 1,310 32.5% Indirect costs (994) (947) EBITDA ((*)) 533 11 2% 11.2% 363 9 0% 9.0% Depreciation (106) (121) Operating margin 427 8
Slide 15: Significant action on costs to offset lower volumes
2009 Full Year Results 15 Significant action on costs to offset the impact of lower volumes EBITDA Volume FY08 effect Scope EBITDA and others FY09 (306) Fixed costs Price savings 58 Purchasing 533 effect savings 62 (38) 54 363 Arbitration in Purchasing Fixed costs a o o favor of prices p ces optimiz
Slide 16: Sharp reduction in indirect costs: rigor and restructuring
2009 Full Year Results 16 Sharp p reduction in indirect costs : rigor g and restructuring g in M€ 994 26 947 21 3 Other incl.Autres foreigndont exchange effect change 59 Madeco &Madeco Intercond& ((*)) Intercond* Intercond 947 -7% Constant Périmètre scope constant at constant 885 scope 2008 2009 • I
Slide 17: An unprecedented restructuring effort
2009 Full Year Results 17 An unprecedented p restructuring g effort ((119 M€ incl. 7 sites closure)) fBy geographic area fBy business segments Other Total = 119 M€ areas 14% 52% 34% Western Europe Central C t l Europe fPhasing throughout the year(**) Total T t l = 1,800 people Q1 Q2 Q3 Q4 (*) Electr
Slide 18: Income Statement (2/2)
2009 Full Year Results 18 Income Statement ((2/2)) in Million € 2008 2009 Operating income 214 153 Financial charge (79) (102) Income befor tax 135 51 Effective tax rate of I Income tax t (50) (39) profitable companies : 21.4% Net income from operations 84 12 Net income Group share 82 8 Net income e
Slide 19: Balance sheet: Net debt divided by ~4
2009 Full Year Results 19 Balance sheet : Net debt divided by y~4 in Million € 31 dec 2008 31 dec 2009 Long-term fixed assets 1,525 1,693 impact of which goodwill 400 of goodwill 335 allocation Deferred tax assets 91 57 Non current assets Non-current 1 616 1,616 1 750 1,750 Working Capital 1,004 908
Slide 20: Strong cash generation in 2009
2009 Full Year Results 20 Strong g cash g generation in 2009 Change in Dividends 8 Working capital Net debt Operational D 08 Cash Dec C h Fl Flow Restructuring (57) Divestitures CAPEX (44) 250 193 2009 charge : (156) 119 M€ Margin calls reimbursement (536) 140 Others Net debt 61 Dec 09 (141) ( ) Red
Slide 21: Operational working capital reduced faster than sales
2009 Full Year Results 21 Operational p Working g Capital p reduced faster than sales : + 100 M€ cash Operational Working Capital in M€ and in % of sales(*) at current metal prices 23.7% Reduction of tons of copper in inventories : 19.4% -21% vs dec.’08 21.5% 18.9% 1 717 1 208 1 076 954 1 2 3 June J
Slide 22: What strategy to leverage the recovery?
2009 Full Year Results 22 What strategy to leverage the recovery ? Frédéric Vincent Chairman and CEO
Slide 23: An objective focused on the long term beyond the current cycle
2009 Full Year Results 23 An objective focused on the long term beyond the current cycle Industrial Adapt Ad t the th offer ff tot performance as growth a profitability lever opportunities Build sustainable Capex aimed at The customer at increasing gggrowth th h the heartt and of the strategy profit
Slide 24: Growth opportunities: Nexans' offer meets growing needs
2009 Full Year Results 24 Growth opportunities Nexans’ offer is positioned to meet growing needs on the long term : 3 examples of markets Transmission and distribution : interconnections and renewable energies Transportation T t ti : railways, il a strong t market k t for Nexans Energy gy resources
Slide 25: Key actor for transmission and distribution networks
2009 Full Year Results 25 Interconnections Growth opportunities Nexans, a key actor for transmission and distribution networks (T&D)
Slide 26: Renewable energies: a complete offer for wind energy
2009 Full Year Results 26 Interconnections Growth Renewable E. opportunities Renewable energies : a complete offer for the wind energy market Un Medium voltage submarine cable + accessories Energy Infrastructures Industry High voltage Laying capacity underground cable + accessories Flexible cable Hi
Slide 27: Transportation: railways, a strong market for Nexans
2009 Full Year Results 27 Interconnections Growth Renewable E. opportunities Railways Transportation : railways, a strong market for Nexans
Slide 28: Oil resources: cables for offshore production
2009 Full Year Results 28 Interconnections Growth Renewable E. opportunities Railways Oil & Gas Oil resources : Nexans cables for offshore production
Slide 29: Customer
2009 Full Year Results 29 Growth Customer opportunities Products Innovation KAM(*) Logistics program Customer Pricing Satisfaction surveys (* ) Key Account Managers
Slide 30: Extend the offer: several achievements in 2009
2009 Full Year Results 30 Growth Extend the offer C Customer opportunities Several achievements in 2009 : Logistics g • VMI (Vendor Management Inventory) Services • Packaging and onsite cutting services Assistance • Simulate line loss reductions to power • Offer network maintenance services utilitie
Slide 31: Industrial performance, a profitability lever
2009 Full Year Results 31 Operational Growth Extend Industrial Excellence C Customer opportunities the offer performance Industrial performance, a profitability lever Safety and Costs Supply Chain Quality Management Safety, a tool for Reduce raw material Flexibility, sustainable consumption, reduce
Slide 32: Footprint and capex: rationalize the production tool
2009 Full Year Results 32 Operational Growth Extend Industrial Excellence C Customer opportunities the offer performance Footprint and capex Industrial performance, a profitability lever Need to further rationalize the production tool Restructuring budget for 2010 Optimize capacity by business ≅ 60
Slide 33: External growth: the example of Madeco
2009 Full Year Results 33 Growth Extend Industrial opportunities C Customer the offer performance E t External l growth th Acquisitions servicing a more resilient model The example of MADECO Colombia Brazil 9 Strong potential for Oil & Gas (7 billion $ investment plan). 9 PAC program (growth acceler
Slide 34: Conclusion (1/2)
2009 Full Year Results 34 Conclusion (1/2) 2009 : iinitiatives iti ti b beyond d th the cycle l • Confirmation of reaction ability and resilience • Investment on growth engines • Accentuation of transformation program cross-company • High cash generation enabling the Group to continue to invest for
Slide 35: Conclusion (2/2): Perspectives 2010
2009 Full Year Results 35 Conclusion (2/2) P Perspectives ti 2010 • Short-term uncertain context of economic recoveryy (Q1 Sales 2010 = Q4 Sales 2009 but < Q1 2009) • Improvement off the h short-term h profitability f bl d depending d upon the return of volumes on the industry and building markets •
Slide 36: Appendices
2009 Full Year Results 36 Appendices
Slide 37: Sales and profitability by segment
2009 Full Year Results - Appendix 37 S Sales and profitability f by segment 2008 2009 (in Million €) Sales OM OM % Sales OM OM % Energy Infrastructure 1,917 223 11.7% 1,798 179 10.0% Industry 924 65 7.0% 746 6 0.7% B ildi Building 1 089 1,089 114 10.4% 10 4% 838 44 5 3% 5.3% Telecom Infrastructure 2
Slide 38: Impact of foreign exchange and consolidation scope
2009 Full Year Results - Appendix 38 Impact off foreign f exchange and consolidation scope Organic (in Million €) 2008 Forex Scope growth 2009 Energy Infrastructure 1,917 (33) 77 (164) 1,798 Industry 924 (6) 40 (212) 746 Building 1,089 (15) 42 (278) 838 Telecom Infrastructure 218 (5) (7) (21) 185 Pr
Slide 39: Sales stabilization at Q4 2009
2009 Full Year Results - Appendix 39 S Sales stabilization at Q4 Q 2009 Cumulated YOY organic growth Q1 2009 Q2 2009 Q3 2009 Q4 2009 Energy Infrastructure -5% -6% -8% -8.8% I d t Industry -25% 25% -28% 28% -27% 27% -24.0% 24 0% Building -21% -23% -25% -26.4% Telecom Infrastructure 3% -6% 6% -9% 9% -
Slide 40: 2008 Income statement as published and restated
2009 Full Year Results - Appendix 40 2008 Income statement as published and restated in Million € 2008 2008 restated(*) Sales 4,776 4,776 at constant metal prices and exchange rates Margin on variable costs 1,527 1,525 Indirect costs (994) (993) EBITDA 533 532 Depreciation (106) (109) Operating marg
Slide 41: 2008 Balance sheet as published and restated
2009 Full Year Results - Appendix 41 2008 Balance sheet as published and restated in Million € 31 dec 2008 31 dec 2008 restated(*) Long-term fixed assets 1,525 1,566 of which goodwill 400 308 Deferred tax assets 91 92 Non-current assets 1,616 1,658 Working Capital 1 004 1,004 1 004 1,004 Total to fi
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