Nexan Ne xans 20 2019 19 Fu Full ll Ye Year ar Re Resu sults lts th Februa Paris, s, 20 th ruary ry 2020
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 visit the Group’s website where they can view and download the presentation of the 2019 annual results to analysts as well as the 2019 financial statements and Nexans Universal Registration Document, which includes a description of the Group’s risk factors - particularly those related to the investigations into anti-competitive behavior launched in 2009. In addition to the risks inherent in executing the New Nexans Transformation Plan, the uncertainties include: o o The uncertain economic and political environments in the United States and Europe, with the risk of growth being slowed by potential major changes in US trade policy on one side of the Atlantic and the possible consequences of Brexit on the other. The impact of protectionist trade policies (such as those implemented by the current US government), as well as growing pressure to increase local content requirements. o Geopolitical instability, particularly in certain countries or regions such as Qatar, Libya, Lebanon, Iraq, and the Persian/Arabian Gulf as well as in Hong Kong. o The impact that the coronavirus epidemic could have on our business and in particular our Chinese operations, our suppliers. In addition, our vessels and products could be affected by restrictions imposed by local authorities on Asian ports operations. o Political, social and economic uncertainty in South America, such as in Brazil, Chile, Venezuela and Bolivia, which i) is affecting the building market as well as major infrastructure projects in the region (such as Maracaibo project in Venezuela), ii) creating exchange o rate volatility and iii) increasing risks of customers default. A marked drop in non-ferrous metal prices resulting in the impairment of Core exposure, not having an impact on cash or operating margin, but impacting net income. o The impact of growing inflationary pressure, particularly on commodities prices (resins, steel,) and labor costs, which could affect competitiveness depending on the extent to which they can be passed on to customers in selling prices. o The sustainability of growth rates of the fiber and copper structured cabling (LAN) market and the Group’s capacity to seize opportunities relating to the move to higher performing categories in this market. o The speed of deployment of “ ftth ” (“fiber to the home”) solutions in Europe and North West Africa and the Group’s capacity to seize opportunities relating to the development of this market. o The risk that the sustained growth expected on the North American automotive markets and on the global electric vehicle market does not materialize. o o Fluctuating oil and gas prices, which are leading Oil & Gas sector customers to revise their exploration and production capex programs at short notice. The considerable uncertainty about the implementation of these customers’’ capex programs may also affect the Group ability to plan for future means of cables and umbilicals for these customers. The risk of the award or entry into force of subsea and land cables contracts being delayed or advanced, which could interfere with schedules in a given year. o Inherent risks related to (i) carrying out major turnkey projects for high-voltage cables, which will be exacerbated in the coming years as this business becomes increasingly concentrated and centered on a small number of large-scale projects (NSL, East Anglia One, o Hornsea 2, Mindanao-Visayas, Lavrion - Syros, Seagreen, Mallorca - Menorca and DolWin6, the latter which will be our first contract to supply and install HVDC extruded insulation cables), (ii) the high capacity utilization rates of the plants involved, (iii) the projects’ geographic location and the political, social and economic environments in the countries concerned (Venezuela, Philippines) Uncertainty as regards the award of a portion of the German links projects with respect to technical, delivery time and capital expenditures challenges as well as risks associated with the extent of contractual liabilities o The inherent risks associated with major capital projects, particularly the risk of completion delays and the risks of delay in time to win projects to fill the new capacities. These risks notably concern the construction of a new subsea cable laying ship, the extension of o Charleston plant in North America to increase the production of subsea high voltage cables, two projects that will be instrumental in ensuring that we fulfill our 2020 and 2021 objectives. Inherent risks related to (i) the reorganization project announced in January 2019 for the land high voltage activity that could lead to delays in projects or generate additional costs, and (ii) the transformation project in the land high voltage activity to manufacture new o technology such as 525kV HVDC extruded cables for mega onshore projects, which could question a rapid return to balance. Without major operational impacts, the two following uncertainties may have an impact on the financial statements: Sudden changes in metal prices that may affect customers’ buying habits in the short term; o The impact of foreign exchange fluctuations on the translation of the financial statements of the Group’s subsidiaries located outside the euro zone. o INVESTOR RELATIONS: Aurélia BAUDEY-VIGNAUD +33 1 78 15 03 94 aurelia.baudey-vignaud@nexans.com
Age gend nda Hi Highligh lights ts 1 Main in Achie ievem vements ts 2 Ful ull-Year ear Fin inanci cials als 3 Out utlo look 4 Append endices ices 5 2019 Full Year Results
01 01 02 03 04 05 06 HIGHLIGHTS Christopher GUÉRIN CEO
Nex exans ans in 201 2019 9 – Res estored tored Trust st A n new w & co compel pelli ling g Industr dustrial al Ambiti bition on 2019-21 21 1 A m move to Energy rgy Transiti sition on and d Renewable ewables 2 with th tangible gible achiev evement ements Record backlog (*) , long term contract signed with Ørsted A n new w Operating erating Model el focused ed on Cash Generati eration on 3 supported by SHIFT proprietary method A ch chang ange e of cu culture ure and d minds dset et with united ted teams ms 4 determined termined to build ld the e New Nexans Unpr prec eced edent ented ed effort rts over last 18 m months ths to reinforc orce e our 5 Funda damen mental tals s while le managing aging risks s effecti tive vely 6 Nexans ans committ tted ed to be Carb rbon on Neutral ral by 2030 (*) Adjusted subsea backlog of 1.8 Bn € at December 2019 including contracts secured not yet enforced 2019 Full Year Results 5 I
20 2019 19 Key ey Milestones lestones Rea eache ched New Nexans ans Pla lan on Track ck EBITDA ROCE** FREE CA CASH FLOW 413 M€ in 2019 11.1% in 2019 +25 M€ in 2019 (*) 413 12.5% 54 411 (*) 375 11.1% 11.1% (*) 25 325 9.0% (32) (83) 2016 2017 2018 2019 2016 2017 2018 2019 2016 2017 2018 2019 Proposed dividend of 0.40 € per share (*) Including IFRS 16 impact of 29 M€ in EBITDA and FCF, -0,5% in ROCE (**) 12 months Operating Margin on end of period Capital Employed, excluding antitrust provision 2019 Full Year Results 6 I
Financial Performance: Double Digit EBITDA Growth across all Businesses BUILDING DING & INDU DUST STRY Y TELECOM COM HIGH H TERRIT RITORIES ORIES & SOLUTI TIONS ONS & DATA VOLTAG AGE E & PROJECT ECTS Sound momentum both in Improved profitability in Upturn for Special Telecom Solid performance in Europe and South North America and China and LAN business Subsea and recovery America underway in Land EBITDA at 105 M€ (+23% (*) ) EBITDA at 52 M€ (+16% (*) ) EBITDA at 155 M€ (+27% (*) ) EBITDA at 103 M€ (+46% (*) ) versus 120 M€ in 2018 versus 86 M€ in 2018 versus 44 M€ in 2018 versus 68 M€ in 2018 2019 Full Year Results (*) At comparable data, excluding IFRS 16 impact in 2019 7 I
NOR ORDLINK DLINK Project: ject: Major or St Step ep in the e Ener ergy gy Transition nsition Nordl dlink ink is is now providi iding g Green en Energy for mil illi lions s of house sehol holds ds NordLink in a nutshell in in G Germany many and nd Norway way • Client: Statnett, TenneT and the German promotional bank KfW • Facility: Halden, Norway • Contract value for Nexans: 500 M€ Nexans ns has succes essf sfully ully manuf ufac actur ured d and install alled ed the interc rconne onnection ion o between n Germany any and Norway ay to exchange ange green n energies ies (solar ar/win ind d and hydro dropow power) r) Nexans ns designe gned, d, manufac actur ured d and installe alled d between n 2015 and 2019 six o 525 kV mass-im impr pregnat gnated ed (MI) high h voltage ge direct ct curre rent nt (HVDC) interc rconnec onnector or cable les s with a to total al length h of 735 km Proj ojec ect comple leted d on-tim ime, e, including uding the final l test which h was ahead d of o schedul dule e August ust 2019 Skage gerr rrak ak laid 6 cables s on the seabed d and 4 in-lin line joint nts s o 2019 Full Year Results 8 I
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