Nexans Sa · EURONEXT:NEX
Nexans Sa — FY2012 Earnings Presentation
37 slides from Nexans Sa's earnings presentation, Feb 7, 2013
Slide 1: 2012 Full Year results
2012 Full Year results February 7, 2013
Slide 2: Safe Harbor
2012 Full Year results 2 Safe Harbor This presentation contains forward-looking In addition to the risk factors, the main uncertainties statements relating to the Group’s expectations for weighing on 2013 concern in particular: future financial performance, including sales and The global economic
Slide 3: 2012 Overview
2012 Ov erv iew Frédéric Vincent Chairman and CEO
Slide 4: Key facts of the year
2012 Full Year results 4 Key facts of the year February ‘12 August ‘12 September ‘12 Perimeter AmerCable acquisition Yanggu acquisition #1 in Mining and Oil & Gas in A leading manufacturer of Study of possible North America Energy power cables in China divestiture of >7% organic growth in 2012 Neutr
Slide 5: Key figures
2012 Full Year results 5 Key figures FULL YEAR SALES (*) OPERATING MARGIN (**) 5.7% (***) 4,872 M€ 4,594 M€ 4.8% 4.2% 207 M€ 261 M€ 202 M€ (***) Flat organic grow th 2011 2012 2010 2011 2012 OPERATING MARGIN OVER THE YEAR (**) NET DEBT 115 M€ 678 M€ 606 M€ 87 M€ 4.7% 3.6% 222 M€ H1’12 H2’12 Dec '11
Slide 6: Organic growth by area
2012 Full Year results 6 Organic growth by area (Year on year organic growth at constant metal prices) Transmission worldwide -4.7% Europe, Middle-East, Americas Asia-Pacific Africa & Russia +3.1% -1.4% +0.1% Total Group -0.3%
Slide 7: Organic growth by business
2012 Full Year results 7 Organic growth by business (Sales in M€ and year on year organic growth, at constant metal prices) Distributors & Installers Utilities & Operators 1.8% -3.4% 4.9% -1.1% 3.0% -9.5% 1,285 1,294 652 633 659 635 H1'12 H2'12 FY'12 H1'12 H2'12 FY'12 Industry Transmission 3.7% worl
Slide 8: Operating margin evolution
2012 Full Year results 8 Operating margin evolution (Operating margin and operating margin on sales at constant metal prices) 4.7% 3.6% Full year 6.1% 3.7% 3.4% 4.2% 6.6% 4.3% 5.5% 3.5% 3.8% 2.3% D&I Industry TD&O Total Group H1'12 H2'12
Slide 9: Transmission
2012 Full Year results 9 Transmission Submarine Land 1,254 M€ 945 M€ 1.0 year (*) 2010 Backlog +33% 51% 49% Europe Middle- 2011 2012 & East Other 37% +12% 63% +8% Organic Q1’12 Q2’12 Sales by 2012 growth (*) Q3’12 Q4’12 destination (*) -15% -32% Year on year organic growth In Europe and Middle-East:
Slide 10: Utilities & Operators: uneven performance among areas
2012 Full Year results 10 Utilities & Operators: uneven performance among areas U&O sales by area (*) Utilities (1.1 Bn€) SOUTH APAC AMERICA 13% Sales have not reached FY‘11 level, despite 16% NORTH solid performance in North America AMERICA 7% Slowdown in overhead lines in Brazil and 1.3 Bn€ we
Slide 11: Industry: Automotive and resources are booming while Europe is weakening in H2
2012 Full Year results 11 Industry: Automotive and resources are booming while Europe is weakening in H2 Sales growth In M€ 1,195 Nexans 991 Operating margin at stable level AmerCable +4.7% (*) (3.7%) vs. last year 2011 2012 (*) YoY growth excluding AmerCable: 3.7% Resources Nuclear Mining • AmerC
Slide 12: Distributors & Installers: 2% organic growth paired up with encouraging profitability
2012 Full Year results 12 Distributors & Installers : 2% organic growth paired up with encouraging profitability Sales by area (*) Organic growth by area (**) SOUTH 18% APAC AMERICA 15% 13% 10% Growing 5% NORTH areas AMERICA 1.3 Bn€ Europe 3% 24% North APAC MERA South America America EUROPE -6% 39%
Slide 13: 2012 in summary
2012 Full Year results 13 2012 in summary Strategic initiatives Submarine Mixed environment •One acquisition and one • Depressed economic Greenfield in North •Recovery plan in progress climate in Europe, Brazil America & Australia in H2 •One acquisition in China • Higher competition in •Debt restruc
Slide 14: Financial results
Financial results Nicolas Badré Chief Financial Officer
Slide 15: Early adoption of IAS 19 Revised
2012 Full Year results 15 Early adoption of ‘IAS 19 Revised’ IAS19 Revised is the new rule for Pension provision which has to be implemented in all IFRS companies in 2013 at the latest Principles: • End of corridor mechanism and actuarial gains and losses amortization in P&L • Full recognition o
Slide 16: Key figures
2012 Full Year results 16 Key figures Restated 2011 after adoption of IAS 19 Revised In M€ 2011 2012 Sales 6,920 7,178 At current metal prices Sales 4,594 4,872 At constant metal prices EBITDA(*) 397 351 Operating margin 261 202 Operating margin rate at constant metal prices 5.7% 4.2% Operating marg
Slide 17: Income statement (1/3)
2012 Full Year results 17 Income statement (1/3) Restated 2011 after adoption of IAS 19 Revised In M€ 2011 2012 Sales 4,594 4,872 At constant metal prices Margin on variable costs 1,481 32.2% 1,487 30.5% Indirect costs (1,084) (1,137) EBITDA(*) 397 8.6% 351 7.2% Depreciation (136) (149) Operating ma
Slide 18: EBITDA evolution
2012 Full Year results 18 EBITDA evolution Restated 2011 after adoption of IAS 19 Revised In M€ FX & Scope +33 397 Volume effect +18 Transmission -41 Operating costs -19 351 Price & Mix -37 EBITDA 2011 EBITDA 2012
Slide 19: Income statement (2/3)
2012 Full Year results 19 Income statement (2/3) Restated 2011 after adoption of IAS 19 Revised In M€ 2011 2012 Sales 4,594 4,872 At constant metal prices Margin on variable costs 1,481 32.2% 1,487 30.5% Indirect costs (1,084) (1,137) EBITDA(*) 397 8.6% 351 7.2% Depreciation (136) (149) Operating ma
Slide 20: Income statement (3/3)
2012 Full Year results 20 Income statement (3/3) Restated 2011 after adoption of IAS 19 Revised In M€ 2011 2012 Operating income (43) 142 Financial charge (112) (*) (112) Income before tax (155) 30 Income tax (31) (5) Net income from operations (186) 25 Net income Group share (178) 27 Proposed divid
Slide 21: Balance Sheet
2012 Full Year results 21 Balance Sheet Restated 2011 after adoption of IAS 19 Revised In M€ 31 Dec. 2011 31 Dec. 2012 Long-term fixed assets 1,785 2,069 of w hich goodw ill 386 509 Deferred tax assets 122 141 Non-current assets 1,907 2,210 Working Capital 961 1,124 Total to finance 2,868 3,335 Net
Slide 22: Operating Working capital evolution
2012 Full Year results 22 Operating Working capital evolution % of current sales, based on last 3 month sales* 4 21.2% 18.9% 18.9% 18.7% 18.3% 18.4% 17.0% 16.5% Jun ‘09 Dec ‘09 Jun ‘10 Dec ‘10 Jun ‘11 Dec ‘11 Jun ‘12 Dec ‘12 18.9% 18.7% 17.0% 20.2% (*) 19.6% (*) 19.2% (*) Operating working capital e
Slide 23: Debt evolution
2012 Full Year results 23 Debt evolution In M€ AmerCable & Dividends Yanggu 33 341 606 Capital increase & Others 53 Restructuring Change costs in WC 27 Capex 26 222 161 Op. Cash Flow (*) 151 Net Debt Net Debt Dec’11 Dec’12 Transmission Non +26 M€ operating WC Metal Cables (*) Operating cash flow is
Slide 24: Debt: reinforcement of liquidity structure
2012 Full Year results 24 Debt: reinforcement of liquidity structure RCF: extension from 540 M€ to c.600 M€ with covenant more flexible over 2013 and 2014 Long-term financing Issuance of a new bond of 250 M€ due March’18 Coupon: 4.25% per annum In M€ 1,488 275 Convertible Bond 250 Short-term borrowi
Slide 25: Ambitions for the future Challenges
Ambitions for the future Challenges Frédéric Vincent Chairman and CEO
Slide 26: Ambitions: OM and ROCE x2 by 2015
2012 Full Year results 26 Ambitions : OM and ROCE x 2 by 2015 Mature Attractive High Voltage Markets Markets 350 - 400 Services & Innovation Manufacturing and Purchasing Cost Reduction Organic Growth Turnaround +60 Restore competitiveness in Europe +100 200 Scope +60 4,872 SALES 5,600 4.2% OM on sal
Slide 27: Objective for Submarine High Voltage: get back to the forefront
2012 Full Year results 27 High Scope Voltage Mature Attractive Markets Markets Submarine Objective for Submarine High Voltage : get back to the forefront Achieve double digit topline growth rate as early as FY’13 Target double digit profitability at the end of the stabilization period Leverage on “N
Slide 28: Objective for Land High Voltage: remain a key player in Europe
2012 Full Year results 28 High Scope Voltage Mature Attractive Markets Markets Land Objective for Land High Voltage: remain a key player in Europe and develop in China and the US Europe: refer to ‘Mature markets’ Launch the Charleston Greenfield factory in North America (HV & EHV) Develop Yang
Slide 29: Cost saving study in 2013 with objective of c. 70 M€ beyond 2015
2012 Full Year results 29 Mature Markets Scope High Attractive Voltage Restore Markets competitiv eness Cost reduction and organization rationalization to help improve financial performance and restore competitiveness Cost saving study in 2013 with the objective of c. 70 M€ beyond 2015 (subject to c
Slide 30: Increase operating margin in Mature Markets
2012 Full Year results 30 Mature Markets Scope High Attractive Voltage Cost reduction and Markets differentiation Increase Operating margin in Mature Markets mainly from: Improvement in manufacturing performance and purchasing excellence in North America and Europe Innovation & Services developm
Slide 31: Focus on key markets within selected countries
2012 Full Year results 31 Scope High Mature Attractive Markets (1) Voltage Markets Focus on key markets within selected countries and benefit from expansion of AmerCable sales out of North America Nexans AmerCable Nexans Yanggu New organization to MERA +6.1 % 12 Bn€ Investment in a new leverage stro
Slide 32: Guidance 2013
2012 Full Year results 32 GUIDANCE 2013 Progressive recovery in Nexans Yanggu ramp up and Submarine (not yet normative) Falcon start up costs Strong push of Nexans H1’13 probably low (Europe, AmerCable Brazil) Positive outlook in North America Legal costs unpredictable, Positive expect
Slide 33: Questions & Answers
Questions & Answ ers
Slide 34: Appendices
Appendices
Slide 35: Sales and profitability by segment
2012 Full Year results 35 Sales and profitability by segment Restated 2011 after adoption of IAS 19 Revised 2011 2012 In M€ Sales OM OM % Sales OM OM % Transmission, Distribution & 2,090 143 6.8% 2,088 70 3.4% Operators Industry 991 36 3.6% 1,195 44 3.7% Distributors and Installers 1,217 70 5.8% 1,2
Slide 36: Impact of foreign exchange and consolidation scope
2012 Full Year results 36 Impact of foreign exchange and consolidation scope Restated 2011 after adoption of IAS 19 Revised Organic 2011 FX growth Scope 2012 In M€ Transmission, Distributors & 2,090 56 (84) 26 2,088 Operators Industry 991 21 38 145 1,195 Distributors & Installers 1,217 45 23 - 1,285
Slide 37: I /\fexans
I /\fexans