Nexans Sa · EURONEXT:NEX
Nexans Sa — H1 2019 Earnings Presentation
40 slides from Nexans Sa's earnings presentation, Jul 24, 2019
Slide 1: Nexans 2019 Half Year Results
Nexans 2019 Half Year Results London, 24th July 2019
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. o The uncertain economic and political environments in the United States and Europe, wi
Slide 3: Agenda
AGENDA 1. Highlights 2. Key Financials 3. Achievements & Progress 4. Deals Signed 5. Appendices 3 I 2019 Half Year Results
Slide 4: Highlights
1 HIGHLIGHTS Christopher Guérin CEO
Slide 5: First Half 2019: Solid Performance
1 First Half 2019: Solid Performance Market A positive market dynamic Supporting our top line Growth 5% organic growth Group sales reaching 3.432 billion € Financials 195 M€ EBITDA 19% improvement vs. last year at comparable data Transformation Transformation plan in line with expectations A positiv
Slide 6: Performance Half Year 2019
Performance Half Year 2019 Business view BUILDING & HIGH INDUSTRY TELECOM TERRITORIES VOLTAGE & SOLUTIONS & DATA & PROJECTS Solid momentum for Building Lower volumes (phasing) and Positive trend in Aerospace, Sound momentum under the effect and recovery for Utilities improved margins in submarine HV
Slide 7: Key Figures
Key Figures HIGHLIGHTS +5.0% Organic Growth EBITDA Sales at constant metal prices in M€ EBITDA in M€ +19% like for like +5.0% 2,311 M€ 195 M€(*) 172 M€ IFRS16 153 M€ impact 2,201 M€ 181 June’ 18 FX Organic growth Scope June’ 19 H1’18 H2’18 H1’19 ROCE and Working Capital Net Debt evolution ROCE(**) O
Slide 8: EBITDA Half Year 2019
EBITDA Half Year 2019 HIGHLIGHTS Strong improvement versus 2018 153 + 19% 181 195 29 28 (18) 15 12 (1) 14 (30) 22 June 2018 FX & PCS & labor Cost reduction Transformation Value Growth Conjunctural 2018 June 2019 IFRS 16 June 2019 Scope inflation initiatives Plan SHIFT Initiatives Growth One-offs (ex
Slide 9: Building & Territories
Building & Territories HIGHLIGHTS Initial tangible results of SHIFT Sales at constant metal: 910 M€ Business Update Organic growth +2.9% +6.1% +7.5% Overall on a good dynamic on volume and pricing SHIFT modules started in Q4’18 bringing ~14 M€ positive impact 1 Sales Launched in Accessories bu
Slide 10: High Voltage & Projects
High Voltage & Projects HIGHLIGHTS Improved margins despite lower volumes Sales at constant metal: 324 M€ Business Update Organic growth -19.6% -23.1% -6.0% Subsea: Flawless execution while improving industrial competitiveness Land: Transformation plan underway and site closure in Germany 1 Sale
Slide 11: Telecom & Data
Telecom & Data HIGHLIGHTS Volumes and margins benefiting from cost reduction and SHIFT initiatives Sales at constant metal: 270 M€ Business Update Organic growth -4.2% +0.7% +7.7% Strong demand for optical fiber cables and accessories Dynamic trend in LAN US and special Telecom cables 1 Sales
Slide 12: Industry & Solutions
Industry & Solutions HIGHLIGHTS Sound profitability with limited organic growth Sales at constant metal: 600 M€ Business Update Organic growth +1.1% +4.4% +2.2% Growth pushed up by non-harnesses activities Profitable growth and significant efforts on fixed costs reductions 1 Sales Strong dynam
Slide 13: Key Financials
2 KEY FINANCIALS Jean-Christophe Juillard CFO
Slide 14: Income Statement (1/2)
Income Statement (1/2) Other KEY FINANCIALS Key figures LTM EBITDA evolution in M€ 367 In M€ June 2018 June 2019 (**) 354 (15) 15 Sales at current metal prices 3,282 3,432 24 (4) Sales at constant metal prices 2,201 2,311 (21) 8 Margin on variable costs 680 712 44 (38) margin rate (*) 30.9% 30.8% EB
Slide 15: Income Statement (2/2)
Income Statement (2/2) KEY FINANCIALS Key figures From Operating Margin to Operating Income 113 In M€ June 2018 June 2019 Operating margin 82 113 113 Operating income 91 (54) (182) Financial charge (31) (31) (54) Income before tax 59 (85) 10 5 -54 Operating Reorganization Proceeds from Other Operati
Slide 16: Net debt evolution
Net debt evolution KEY FINANCIALS Net Debt last 12 month evolution in M€ 709 +43 M€ 132 577 534 77 (65) 35 (1) (2) (16) (243) 258 June’18 OCF(*) CAPEX Disposals Restructuring Operating Non Equity FX & Other June’19 IFRS 16 June’19 of assets cash-out Working Capital Operating WC Operations(**) (excl.
Slide 17: Working capital
Working capital KEY FINANCIALS OWC on Sales - excluding Projects OWC 12 month evolution Evolution of Operating Working Capital excluding High Voltage & Project activities(*) (65 M€) improvement 15.6% 14.6% 14.2% Série OWC/Sales Série Operating Working Capital June’17 June’18 June’19 June 2018 Submar
Slide 18: ROCE
ROCE(*) KEY FINANCIALS Group ROCE in % ROCE excluding High Voltage & Projects (in %) 10.3% 8.7% 8.3% 9.2% 9.2% 7.8% June 2017 June 2018 June 2019 June 2017 June 2018 June 2019 ROCE 12 month evolution (in %, excluding High Voltage & Projects) (0.3%) 8.7% 1.2% 7.8% 0.0% June 2018 FX & Scope Operating
Slide 19: Key capital structure KPIs
Key capital structure KPIs KEY FINANCIALS IFRS Interest Charge over EBITDA impacted 14% 14% 14% Interest / EBITDA 10% Interest Charge Dec 2017 June 2018 Dec 2018 June 2019 Net Debt and Gearing ratios Covenant at 120% (post IFRS 16) 57% 38% Gearing 23% 24% Net Debt Dec 2017 June 2018 Dec 2018 June 20
Slide 20: Strong liquidity covering future debt refinancing needs
Strong liquidity covering future debt refinancing needs Net Debt breakdown (incl. IFRS 16) Liquidity and debt redemption schedule In M€ In M€ June 2019 1,173 Gross Debt 1,173 123 Undrawn facility 200 Cash and cash equivalents (464) committed up to 2023 600 325 Net Debt 709 250 Cash & cash 464 equiva
Slide 21: 2019 objectives
2019 objectives HIGHLIGHTS EBITDA guidance improved from [350-390] M€ to [360-390] M€ In M€ In % at constant perimeter 360-390 M€ 9.0-11.0% 325 M€ 9.0% o FY’19 FCF expected negative due to restructuring outflow o End of year net debt in the region of 600 M€ after IFRS o FY’19 Net income expected neg
Slide 22: Achievements & Progress
3 ACHIEVEMENTS & PROGRESS Christopher Guérin CEO
Slide 23: Transformation plan: significant progress
Transformation plan : significant progress ACHIEVEMENTS & PROGRESS EBITDA(*) in M€ 500 325 FY18 FY19E FY20P FY21P Transformation Plan FY19 FY20 FY21 Actions financial Organic growth & value growth init. FY19 FY20 FY21 impact (Cumulated % of 2021 Run Cost reduction initiatives FY19 FY20 FY21 Rate) Pr
Slide 24: Transformation plan: significant progress
Transformation plan : significant progress ACHIEVEMENTS & PROGRESS Restructuring : Announcement on 24th January 2019; all the main Progress vs. 2019 ambition A1- Restructuring project milestones have been reached so far, implementation starting in Q3 2019 0% 100% 1,200 Initiatives tracked on weekly
Slide 25: Transform our positioning: change playfield to grow value
TRANSFORM OUR POSITIONING New value proposition supported by Services & Solutions under deployment Change Playfield to grow value Building High Voltage Telecom Industry & Territories & Projects & Data & Solutions o Building o Renewables (Wind offshore) o Data transmission o Transportation o Smart Ci
Slide 26: High Voltage & Projects: resilient backlog
High Voltage & Projects We are purposely building a resilient and profitable backlog with limited risks A backlog above 1.2B € and a 90% load ratio for 2019-20 Preparing for next deals to come, with robust pipeline ahead Nexans Submarine projects under execution A selection Future subsea interconnec
Slide 27: High Voltage & Projects: leader in project execution
High Voltage & Projects Leader in project execution Uses extensively digital simulations, advanced analytics tools and robust project model with control gates. SUBSEA DECISION MODELLING TOOL Nexans offers an adequate balance between cable related A Nexans tool risk vs. cost on its projects to warran
Slide 28: Deals Signed
4 DEALS SIGNED
Slide 29: Nexans brings Energy to Life
Nexans brings Energy to Life DEALS SIGNED Building & Territories High Voltage & Projects NEXANS INTRODUCES A NEW ASSET MANAGEMENT WINDFLOAT ATLANTIC: NEXANS TO SUPPLY TURBINE SERVICE FOR DISTRIBUTION SYSTEM OPERATORS CABLES & ACCESSORIES FOR THE WORLD’S FIRST (DSOS) FLOATING OFFSHORE WIND FARM OPERA
Slide 30: Nexans brings Energy to Life: Innovation
Nexans brings Energy to Life Innovation NEXANS EXPANDS ITS CONNECTED DRUMS SERVICE TO NEW GLOBAL MARKETS Nexans technology, the first in the market, Nexans has expanded Connected Drums’ service enables DSO customers to know the exact location offer to new international markets, including the UK, of
Slide 31: Appendices
5 APPENDICES
Slide 32: Nexans, a global cable solution provider
Nexans, a global cable solution provider APPENDICES End markets Sales by business segments o Building o Smart Cities / Smart Grids Building o E-mobility & Territories o Local infrastructure o Decentralized energy systems o Rural electrification 10% 19% o Offshore wind farms o Interconnections High V
Slide 33: Sales and profitability by segment
Sales and profitability by segment (excl. IFRS 16) APPENDICES June 2018 June 2019 EBITDA In M€ Sales EBITDA OM OM % Sales EBITDA EBITDA % OM OM % % Building & Territories 846 52 6.2% 28 3.3% 910 81 8.8% 57 6.2% High Voltage 348 36 10.4% 16 4.7% 324 33 10.2% 18 5.5% & Projects Telecom & Data 249 22 8
Slide 34: Impact of foreign exchange and consolidation scope
Impact of foreign exchange and consolidation scope APPENDICES Sales at constant metal prices, in M€ June 2018 FX Organic growth Scope June 2019 Building & Territories 846 0 64 0 910 High Voltage & Projects 348 (3) (21) (0) 324 Telecom & Data 249 2 19 0 270 Industry & Solutions 589 3 13 (4) 600 Other
Slide 35: Sales by quarter by segment
Sales by quarter by segment Sequential Growth Sales at constant metal in M€ APPENDICES Building & Territories High Voltage & Projects 450 441 454 455 455 +57.9% +52.9% 396 +13.5% 211 199 177 158 +2.1% 137 126 -1.5% -0.2% +0.2% -20.1% -6.7% -10.4% -16.0% Q1’18 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 -39.0% Q1’
Slide 36: 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) – excl. IFRS16 to the owners of the parent (in M€) 6,370 6,490 4,604 4,431 4,571 4,409 9.0% 6,239 8.5%
Slide 37: Income statement: gross margin and indirect costs evolution
Income statement: gross margin and indirect costs evolution APPENDICES Gross Margin evolution 30.8% 21 30.9% 12 0 (19) 14 4 June 2018 FX & PCS & labor inflation Cost reduction initiatives Transformation Plan Value Growth Initiatives Conjunctural Growth June 2019 Scope SHIFT Indirect costs evolution
Slide 38: Income statement: financial charge breakdown
Income statement: financial charge breakdown APPENDICES Financial charge In M€ June 2018 June 2019 Cost of debt (22) (19) Net foreign exchange gain (loss) 0 (6) Interest on Pension (3) (3) Others (6) (3) Financial charge (31) (31) 38 I 2019 Half Year Results
Slide 39: Balance sheet: general overview
Balance sheet: general overview APPENDICES In M€ December 2018 June 2019 1,608 1,814 Fixed assets and other non-current assets 243 241 Of which goodwill - 121 Of which IFRS 16 tangibles Deferred tax assets 162 162 Non-current assets 1,770 1,976 Working Capital 556 758 Total to finance 2,327 2,734 Ne
Slide 40: Balance sheet: net debt breakdown
Balance sheet: net debt breakdown APPENDICES Net Debt breakdown In M€ December 2018 June 2019 Long-term ordinary bonds 771 772 Other long-term borrowings(*) 7 58 Short-term OCEANE convertible bonds 269 - Short-term borrowings and short-term accrued interest not yet due(*) 169 193 Short-term bank loa