Nexans Sa · EURONEXT:NEX
Nexans Sa — Investor Presentation (March 2017)
43 slides from Nexans Sa's investor presentation, March 2017
Slide 1: Company Presentation
Company Presentation March 2017 RESTRICTED
Slide 2: Safe Harbor
Safe Harbor ● 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 log onto the Group's website where they can view and do
Slide 3: Agenda
Agenda 1 Nexans Overview 2 FY’16 Highlights 3 Business Review 4 Key Financials 5 Appendix RESTRICTED
Slide 4: 1. Nexans overview
1. Nexans overview RESTRICTED 4 I - Footer can be personalized as follow: Insert / Header and footer I Date
Slide 5: Nexans, a global cable solution provider
NEXANS OVERVIEW 1 Nexans, a global cable solution provider Well positioned on its four end-markets Sales by business segments End markets Energy and data ● Power transmission infrastructures ● Power/data distribution ● Accessories €5.8 bn Sales* ● Mining Energy ● O&G in 2016 resources ● Renewables ●
Slide 6: Nexans is a solution provider for a more efficient & sustainable future
NEXANS OVERVIEW 1 Nexans is a solution provider for a more efficient & sustainable future Higher voltage & deeper submarine installations Power and data 37 bn€ 1 Aluminum solutions infrastructures Smart grids Fossil & renewable Safer & more reliable cables resisting to harsher 5 bn€ 1 resources cond
Slide 7: Vision of Nexans
1 Vision of Nexans Given market opportunities, the company confirms its focus on 4 sectors: % of sales at constant metal prices in 2016 Power transmission Power and data Power/data distribution 37% infrastructures Accessories Mining Fossil & renewable O&G 9% resources Renewables Power plants Aerospa
Slide 8: 2. FY'16 Highlights
2. FY’16 Highlights RESTRICTED 8 I - Footer can be personalized as follow: Insert / Header and footer I Date
Slide 9: FY'16 Key Take-aways
2 FY’16 Key Take-aways Profitability ● Sales of 5,814 M€; -1.2% organic growth improvement over ● Top Line still affected by depressed O&G global markets (-27%) all segments ● Sales excluding Oil & Gas at +0.7% organic despite negative Organic growth ● Operating Margin +24% at 242 M€ ● 119 M€ contri
Slide 10: Nexans brings Energy to Life
FY 16 HIGHLIGHTS 2 Nexans brings Energy to Life Energy transition Leading role in the development of wind farm technology To equip Hornsea, the world's largest offshore wind farm with a capacity of 1,200 MW, DONG Energy Wind Power A/S chose Nexans cables The annual electricity needs of one million h
Slide 11: Nexans brings Energy to Life
FY 16 HIGHLIGHTS 2 Nexans brings Energy to Life Energy transition Connecting wind farm to the grid Recently announced, Scottish Power Renewables’ 714 MW offshore wind farm - East Anglia ONE- to use Nexans cables and supply energy to half a million households in the UK by 2020 ©ScottishPower Renewabl
Slide 12: Nexans brings Energy to Life
FY 16 HIGHLIGHTS 2 Nexans brings Energy to Life Innovation Innovation helping to reduce the global carbon footprint Qualification of XLPE and higher-voltage MI cables to address very-high capacity DC links Providing Transmission System Operators‘ with the most appropriate solutions allowing consumer
Slide 13: Nexans brings Energy to Life
FY 16 HIGHLIGHTS 2 Nexans brings Energy to Life Innovation Faster and easier grid connections for renewables The new EDRMAX by Nexans™ solution has been designed specifically to enable faster, easier and more cost-effective grid connection of renewable energy resources. The new cable is eco-designed
Slide 14: Nexans brings Energy to Life
FY 16 HIGHLIGHTS 2 Nexans brings Energy to Life Energy transition Long-term commitment to innovative and sustainable mobility Nexans complete solution (connection infrastructure, charging stations, power management and supervision systems) is facilitating the rollout of smart charging infrastructure
Slide 15: Nexans brings Energy to Life
FY 16 HIGHLIGHTS 2 Nexans brings Energy to Life Economic development Facilitating the digital transformation Data centres challenged to address an exponential increase in data transmission will benefit from Nexans “Smart Choices for Digital Infrastructure” Nexans “Smart Choices for Digital Infrastru
Slide 16: Nexans brings Energy to Life
FY 16 HIGHLIGHTS 2 Nexans brings Energy to Life Economic development Helping to meet growing data connectivity needs between continents Nexans cables to connect Brazil to Cameroon to allow high speed broadband between the two continents and meet growing needs for data transmission 6000 km of Nexans
Slide 17: Nexans Foundation
FY 16 HIGHLIGHTS 2 Nexans Foundation 5th Call for projects 17 I
Slide 18: Nexans Sustainable Development Policy
FY 16 HIGHLIGHTS 2 Nexans Sustainable Development Policy 4 Priorities, 11 Ambitions 18 I
Slide 19: 3. Business review
3. Business review RESTRICTED 19 I - Footer can be personalized as follow: Insert / Header and footer I Date
Slide 20: Full Year 2016 key figures
BUSINESS REVIEW 3 Full Year 2016 key figures Another year of improvement driven by strategic initiatives -1.2% organic growth Operating margin +24% Sales at constant metal prices in M€ w/o O&G Operating margin in M€ Impact 242 M€ -1.2% +0.7% 195 M€ 148 M€ HY 2 FX Organic growth Scope HY 1 Working Ca
Slide 21: Sales by geography
BUSINESS REVIEW 3 Sales by geography Sales development impacted by O&G % of Standard Sales 2016 Organic Growth of which O&G Impact -6.7% -3.3% -3.1% 21 I
Slide 22: Distributors & Installers
BUSINESS REVIEW 3 Distributors & Installers Margin progression despite challenging second half Sales at constant metal: 1,127 M€ Business Update Organic growth Organic % of Sales at constant metal -0.5% -2.7% +0.6% growth HY 2 Sales HY 1 BUILDING: -0.8% organic growth ● Positive momentum in MERA and
Slide 23: Industry
BUSINESS REVIEW 3 Industry Solid growth in Renewables and Aerospace offset by O&G Sales at constant metal: 1,171 M€ Business Update Organic growth Organic % of Sales at constant metal +2.9% -0.4% -3.8% growth TRANSPORT RESOURCES OTHERS HY 2 Sales HY 1 Automotive Shipbuilding Railways Aerospace Minin
Slide 24: Transmission Distribution & Operators
BUSINESS REVIEW 3 Transmission Distribution & Operators Strong market drivers but unfavorable project phasing in 2016 Sales at constant metal: 1,842 M€ Market drivers ● Extension of the Transmission network to cope with Organic Need for an interconnected European grid -0.3% -1.2% -2.0% Development o
Slide 25: TD&O / Transmission
BUSINESS REVIEW 3 TD&O / Transmission A strong order backlog for a promising FY’17 growth Organic Growth: -2.2% Sub-sea Organic ● Umbilical's down from sharp decline in upstream O&G +3% -31% +19% however strong order intakes securing load for 2017 growth and promising growth in sales ● Lower activit
Slide 26: TD&O / Utilities and Operators
BUSINESS REVIEW 3 TD&O / Utilities and Operators Softer demand from Utilities in the second half Organic growth: -1.9% Business Update Organic growth Organic % of Sales at constant metal -3.0% -3.6% -1.9% growth HY 2 Sales HY 1 UTILITIES: -2.8% organic growth ● Lower sales in HY 2 in APAC and Europe
Slide 27: Strategic initiatives delivered as expected to overcome volume & price pressure effects
BUSINESS REVIEW 3 Strategic initiatives delivered as expected to overcome volume & price pressure effects Operating margin evolution in M€ FX & scope STRATEGIC PRICE COST Operating INITIATIVES SQUEEZE reserves & others 27 I
Slide 28: Strategic Initiatives progressing as planned
BUSINESS REVIEW 3 Strategic Initiatives progressing as planned 2013 European plan ● + 22 M€ before inflation in addition to the 62 M€ already Fixed Cost delivered in 2015 2015 European plan Reduction ● All OPEX and other Industrial plans launched over the 22 M€ last 3 years are now fully deployed OP
Slide 29: Strategic Initiatives progressing as planned
BUSINESS REVIEW 3 Strategic Initiatives progressing as planned Business Portfolio review almost completed Divested or Closed Business combination concluded with a 3rd party 344 M€ Capital Employed Strategic Re-orientation within the Group 29 I
Slide 30: 4. Key Financials
4. Key Financials 4 Key financials RESTRICTED
Slide 31: Income Statement (1/2)
KEY FINANCIALS 4 Income Statement (1/2) Key figures Gross Margin evolution In M€ 2015 2016 Sales at actual metal prices 6,239 5,814 FX Scope VCR ML Price Op. Pressure Reserves Sales at constant metal prices 4,604 4,431 & others Margin on variable costs 1,428 1,432 Indirect costs evolution margin rat
Slide 32: Income Statement (2/2)
KEY FINANCIALS 4 Income Statement (2/2) Key figures From Operating Margin to Operating Income In M€ 2015 2016 In M€ 2015 2016 Core exposure Impact (52) (6) Operating margin 195 242 Restructuring (100) (33) Net asset Impairment (129) (8) Restructuring (100) (33) Provision for Anti-trust investigation
Slide 33: Focus on cash management
KEY FINANCIALS 4 Focus on cash management Net Debt last 12 month evolution in M€ Restructuring Operating Non FX OCF CAPEX Working cash-out Operating & Other Capital WC OWC on Sales - excluding Projects OWC 12 month evolution – cash impact Evolution of Operating Working Capital excluding Project acti
Slide 34: Balance Sheet strength
KEY FINANCIALS 4 Balance Sheet strength Balance Sheet Interest Charge over EBITDA Interest/ In M€ 2015 2016 EBITDA Long term fixed assets 1,643 1,661 Interest charge Of which goodwill 250 254 Deferred Tax 192 180 Non-current Assets 1,835 1,840 Net debt and gearing ratios Working Capital 405 581 Tota
Slide 35: Strong liquidity covering future debt refinancing needs
KEY FINANCIALS 4 Strong liquidity covering future debt refinancing needs Net Debt breakdown Debt redemption In M€ In M€ 2016 Long-term ordinary Bonds 498 Long-term convertible Bonds 263 Undrawn Other long-term borrowings 5 facility committed up Short-term borrowings and short-term accrued to 2020 46
Slide 36: Strategic initiatives – On the way to 2017
KEY FINANCIALS 4 Strategic initiatives – On the way to 2017 Operating margin evolution in M€ 2015 2016 2017E 148 VCR FCR ML PRICE COST OTHER SQUEEZE 36 I
Slide 37: Priorities ahead: 2017 as a Pivot Year
KEY FINANCIALS 4 Priorities ahead: 2017 as a Pivot Year ● Deliver the 2015-2017 Plan despite the O&G impact Keep momentum on strategic initiatives Balance the mix of improvement levers Execute the growth in project businesses on the back of strong backlog ● Restore a pattern for growth Accelerate th
Slide 38: Reducing Term Debt (year end view)
KEY FINANCIALS 4 Reducing Term Debt (year end view) Type Term Debt Maturities (in M€) 2016 2017 2018 Bond May 2, 2017 350 - - Bond March 19, 2018 250 250 - C Bond* January 21, 2019 275 275 275 Bond May 6, 2021 250 250 250 Bond April 2024 - 200 200 Total 1,125 975 725 * Maturing January 1 2019. If no
Slide 39: Appendices
Appendices J\Sexans BRINGS ENERGY TO LIFE
Slide 40: Sales and profitability by segment
APPENDICES Sales and profitability by segment Sales at constant metal prices, in M€ 2015 2016 In M€ Sales OM OM % Sales OM OM % Transmission, Distribution & Operators 1,935 108 5.6% 1,842 122 6.6% Industry 1,250 57 4.6% 1,171 59 5.0% Distributors & Installers 1,136 63 5.5% 1,127 78 6.9% Other 283 (3
Slide 41: Impact of foreign exchange and consolidation scope
APPENDICES Impact of foreign exchange and consolidation scope Organic Sales at constant metal prices, in M€ 2015 FX growth Scope 2016 Transmission, Distribution & Operators 1,935 (39) (37) (18) 1,842 Industry 1,250 (10) (46) (23) 1,171 Distributors & Installers 1,136 (20) 6 5 1,127 Other 283 (5) 22
Slide 42: Sales by quarter by segment
APPENDICES Sales by quarter by segment Sequential Growth Sales at constant metal in M€ Distributors & Installers Industry TD&O Transmission Utilities & Operators 42 I
Slide 43: Financial highlights
APPENDICES Financial highlights 211 43 I