Nexans Sa · EURONEXT:NEX
Nexans Sa — FY2018 Earnings Presentation
35 slides from Nexans Sa's earnings presentation, Feb 14, 2019
Slide 1: 2018 Full Year Results
Nexans 2018 Full Year Results Paris, 14th February 2019
Slide 2: Safe Harbor
Safe Harbor NB: Any discrepancies are due to rounding. 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 Gro
Slide 3: Executive Summary
EXECUTIVE SUMMARY Performance in line with November communication • Sales at constant metal stable versus 2017 (Organic Growth at -0.8%), of which +4.2% for cables and wires(*) • EBITDA(**) at 325 M€, improved in H2’18 and corresponding to 188 M€ Operating Margin • Strong backlog in High Voltage & P
Slide 4: Agenda
AGENDA 1. Highlights 2. Key Financials 3. Outlook 4. Deals Signed / CSR / Foundation 5. Appendices 4 I 2018 Full Year Results
Slide 5: Highlights
1 HIGHLIGHTS Christopher Guérin CEO
Slide 6: Full Year 2018 key figures
Full Year 2018 key figures HIGHLIGHTS -0.8% Organic Growth EBITDA Sales at constant metal prices in M€ HY 1 HY 2 EBITDA in M€ 4,571 M€ 375 M€ 411 M€ 4,431 M€ 4,409 M€ 325 M€(*) 172 200 172 203 211 153 2016 2017 FX Organic Scope 2018 2016 2017 2018 Growth ROCE and Working Capital Net Debt evolution O
Slide 7: Sales by geographies
Sales by geographies HIGHLIGHTS A contrasted business environment % of Sales at constant metal prices Organic Growth of which O&G Impact High Voltage 15% High Voltage -21.3% -3.8% South America (SAM) 5% SAM 1.2% -0.8% M-E Russia and Africa (MERA) 6% MERA 5.2% +4.2% Org. Growth Asia Pacific (APAC) 12
Slide 8: Building & Territories
Building & Territories HIGHLIGHTS Solid momentum for Building and progressive recovery for Utilities Sales at constant metal: 1,742 M€ Business Update Organic growth Organic growth -1.2% +0.1% +4.5% % of Sales at constant metal +3.5% +6.4% +5.0% +4.4% +7.6% Sales 874 874 896 HY 2 Europe NAM APAC MER
Slide 9: High Voltage & Projects
High Voltage & Projects HIGHLIGHTS Improved order backlog enabling strong visibility Sales at constant metal: 683 M€ Business Update Organic growth +2.8% +31.2% -21.3% SUBSEA: -21.1% organic growth ● Drop in activity resulting from postponements of projects and contracts initially planned in H2’18 S
Slide 10: Telecom & Data
Telecom & Data HIGHLIGHTS Improved LAN & Infrastructure offset by low Special Telecom Sales at constant metal: 496 M€ Business Update +6.0% +0.4% -15.8% +1.1% +3.5% -25.8% Organic growth -3.0% +6.7% -1.8% Organic growth Sales 227 243 247 HY 2 Europe NAM APAC MERA SAM Special 258 270 Telecom 249 LAN
Slide 11: Industry & Solutions
Industry & Solutions HIGHLIGHTS Opposing headwinds for Transport and Resources Sales at constant metal: 1,160 M€ Business Update Organic growth Organic growth -4.6% -1.6% +2.7% TRANSPORT RESOURCES OTHERS +4% +12% +14% +10% +9% Sales 568 539 570 -2% -3% -9% -15% HY 2 602 587 589 Automotive Shipbuildi
Slide 12: Key Financials
2 KEY FINANCIALS Nicolas Badré CFO
Slide 13: Income Statement (1/2)
Income Statement (1/2) KEY FINANCIALS Key figures Gross Margin evolution 31.9% 12 In M€ 2017 2018 13 2 30.9% (39) (15) (54) (14) Sales at current metal prices 6,370 6,490 FX Labor Inflation B&T HV T&D I&S Other Sales at constant metal prices 4,571 4,409 2017 2018 Margin on variable costs 1,458 1,363
Slide 14: Income Statement (2/2)
Income Statement (2/2) KEY FINANCIALS Key figures From Operating Margin to Operating Income In M€ 2017 2018 In M€ 2017 2018 Restructuring (37) (53) Operating margin 272 188 Core exposure impact 64 (15) Net asset Impairment (8) (44) Restructuring (37) (53) Antitrust investigation (6) (1) Proceeds fro
Slide 15: Focus on cash management
Focus on cash management KEY FINANCIALS Net Debt last 12 month evolution in M€ 332 (51) 61 1 330 (149) Disposals of assets Restructuring 32 50 207 cash-out FX (153) Equity & Other Operating Non Operations(*) Working Operating CAPEX Capital WC OCF 2017 (*) Dividend payments (33 M€), share buyback (24
Slide 16: Balance Sheet
Balance Sheet KEY FINANCIALS Balance Sheet Interest Charge over EBITDA Interest/ 24% In M€ 2017 2018 EBITDA 17% 14% 14% Fixed assets and other non-current assets 1,633 1,608 Interest 236 243 charge Of which goodwill Deferred tax assets 135 162 2015 2016 2017 2018 Non-current assets 1,767 1,770 Net D
Slide 17: Strong liquidity covering future debt refinancing needs
Strong liquidity covering future debt refinancing needs Net Debt breakdown Debt redemption In M€ In M€ 2018 Undrawn 1,231 Long-term ordinary bonds 771 600 facility committed up 200 Other long-term borrowings 7 to 2023 956 Short-term convertible bonds 269 325 Short-term borrowings and short-term accr
Slide 18: Outlook
3 OUTLOOK Christopher Guérin CEO Jean-Christophe Juillard CFO
Slide 19: A new Executive team to lead the New Nexans
A new Executive team to lead the New Nexans OUTLOOK Christopher Guérin, Chief Executive Officer Pascal Portevin, Deputy CEO, acting as Special Advisor Why the change? Five business leaders: • Benjamin Fitoussi, Chief Operations Officer, is in charge of the Europe 1. Reinforce proximity to Business C
Slide 20: All transformation initiatives underway
All transformation initiatives underway OUTLOOK C Incremental EBITDA effects by 2021 M€ First 6 A months B A Cost reduction initiatives 210 M€ B Shift transformation 100 M€ C Profit Drivers Growth 55 M€ A1- Restructuring project (Announced) A3- Manufacturing & Working capital o Duplicate the SHIFT p
Slide 21: Strict Discipline in Execution
Strict Discipline in Execution OUTLOOK CENTRAL CONTROL CEO & EXCOM Managing the transformation on weekly pace TOWER BU General Managers • Run a weekly cadence on all initiatives • Track results contribution A1- Restructuring project Transformation teams to the overall Nexans A2- Indirect Cost reduct
Slide 22: Some successes for Profit Drivers activities
Some successes for « Profit Drivers » activities OUTLOOK HV & Projects order backlog(*) Oct 2018 Triton Knoll Offshore wind farm in the UK > 1,250 M€ High Voltage projects Nov 2018 Majorca-Menorca interconnection in Spain +23% Nov 2018 Lavrion-Syros interconnection in Greece Nov 2018 Hornsea 2 offsh
Slide 23: 2019 objectives
2019 objectives OUTLOOK Based on the current market conditions In M€ In % at constant perimeter 350-390 M€ (*) o OWC 9.0-11.0% 325 M€ • Further improvement for Cables 9.0% o FY’19 FCF expected negative due to specific Restructuring and Capex • End of the year leverage < 1.5x o FY’19 Net income expec
Slide 24: Deals Signed, CSR, Foundation
4 DEALS SIGNED CSR FOUNDATION
Slide 25: Building & Territories: >190 M€ contract
Nexans brings Energy to Life DEALS SIGNED Building & Territories OVER THE NEXT TWO YEARS, Nexans will supply medium and low voltage cables to one of the world’s major Utilities for the development of electricity networks in Europe and Latin America. The customer will benefit from a single point of r
Slide 26: High Voltage & Projects: three biggest projects of 2018
Nexans brings Energy to Life DEALS SIGNED High Voltage & Projects THREE BIGGEST PROJECTS OF 2018: ADMIE has awarded Nexans Nexans has won a contract Nexans has been awarded a 111 million euros contract worth over 150 million euros to a full turnkey 100-million-euro for an interconnector between supp
Slide 27: Telecom & Data contracts
Nexans brings Energy to Life DEALS SIGNED Telecom & Data NEXANS HAS BEEN AWARDED NEXANS HAS BEEN AWARDED A 65-MILLION-EURO A MULTIMILLION-EURO FRAME CONTRACT BY TRAFIKVERKET, THE SWEDISH CONTRACT GOVERNMENT’S TRANSPORT ADMINISTRATION with one of the internet and public cloud service giants in FOR TH
Slide 28: CSR Performance
Nexans brings Energy to Life CSR CSR Performance CONTINUOUS IMPROVEMENT IN CORPORATE SOCIAL RESPONSIBILITY PERFORMANCE The Group's CSR initiatives and progress recognized by non-financial rating agencies Nexans is the winner of The Integrated Thinking Award 2018. This European prize for integrated t
Slide 29: CSR initiatives
Nexans brings Energy to Life CSR CSR initiatives NEXANS FOUNDATION: 7TH CALL FOR PROJECTS 89 PROJECTS SUPPORTED WORLDWIDE SINCE 2013 1.3 M PEOPLE BENEFITED FROM SUPPORTED PROJECTS 29 I 2018 Full Year Results
Slide 30: Appendices
APPENDICES exans
Slide 31: Nexans, a global cable solution provider
Nexans, a global cable solution provider APPENDICES End markets Sales by new business segments o Building o Smart Cities / Smart Grids Building o E-mobility & Territories o Local infrastructure o Decentralized energy systems o Rural electrification 11% 16% o Offshore wind farms o Interconnections Hi
Slide 32: Sales and profitability by segment
Sales and profitability by segment APPENDICES 2017 2018 Sales EBITDA EBITDA OM Sales EBITDA EBITDA OM In M€ OM OM % % % % Building & 1,757 126 7.2% 77 4.4% 1,742 120 6.9% 72 4.1% Territories High Voltage & 885 118 13.3% 80 9.1% 683 68 9.9% 34 4.9% Projects Telecom & Data 512 62 12.1% 52 10.1% 496 44
Slide 33: Impact of foreign exchange and consolidation scope
Impact of foreign exchange and consolidation scope APPENDICES Organic Sales at constant metal prices, in M€ 2017 FX Scope 2018 growth Building & Territories 1,757 (70) 75 (20) 1,742 High Voltage & Projects 885 (20) (185) 3 683 Telecom & Data 512 (18) (9) 11 496 Industry & Solutions 1,126 (15) 30 18
Slide 34: Sales by quarter by segment
Sales by quarter by segment Sequential Growth Sales at constant metal in M€ APPENDICES Building & Territories High Voltage & Projects 456 436 438 450 441 454 +52.9% 427 396 +13.5% 239 224 2.1% 207 214 211 +7.9% -1.5% 177 158 137 -1.2% -0.9% +17.0% -10.4% +10.5% -16.0% -4.2% +4.7% -6.7% -11.2% -39.0%
Slide 35: Financial highlights
Financial highlights APPENDICES EBITDA (in M€ and as % of sales Net income/(Loss) attributable Sales at current metal prices (in M€) Sales at constant metal prices (in M€) at constant metal prices) to the owners of the parent (in M€) 6,403 6,239 6,370 6,490 4,587 4,604 4,431 4,571 4,409 9.0% 8.5% 12