Press Backgrounder
A global cable expert
Press Backgrounder
July 2008
PRESS CONTACTS
Céline Révillon
celine.revillon@nexans.com
Tel.: + 33 1 56 69 84 12
Pascale Strubel
pascale.strubel@nexans.com
Tel.: + 33 1 56 69 85 28
For more information: www.nexans.com
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Press Backgrounder
Contents
Cables, at the heart of modern life
Nexans, the industry’s most complete range
1 – Nexans, the worldwide leader in the cable industry
Growing faster than the market
Our core business: energy cables
Three specialty activities: energy infrastructures, industry, and building
2 – Nexans’ strategy
The strategic roadmap for 2007-2009
A targeted acquisition strategy
Priority business segments
Focus on the manufacturing of high value-added, innovative cables
Nexans’ international operations
3 – The customer, central to Nexans’ organization
Multidisciplinary task forces for improved customer service
Dedicated application centers
4 – Leading edge research and innovation facilities
Industry-leading International Research Center
Eight specialized Competence Centers
Innovation, a second nature for Nexans
Supported by world-renowned universities and research centers
5 – Responsible, environment-friendly company
Limiting environmental impact, starting from product design
In-depth environmental audits, and an in-house environmental label
6 – Proactive human resources policy
A competitive and multicultural environment
Training: crucial for progress
A Career Management Committee in each country
7 – Best practices in corporate governance
Active Board of Directors, small Executive Committee
Close trust relationship with shareholders
Dividend increase
Key figures
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Press Backgrounder
Cables, at the heart of modern life
They are part of our everyday environment, often without our
knowing.
They have various sizes, applications and characteristics, and
must withstand extreme twisting, stretching, temperature,
depth, altitude and fire conditions.
They are at the heart of modern life; they wire the planet and
provide the nerves and sinews of developed industrial
economies worldwide.
They are proliferating to meet the increasing needs for power,
voice and data transmission in a wide range of common-use
products and equipment such as cars, ships, railways,
aircrafts, electric motors and transformers, home appliances,
stereo systems… They are cables and cabling systems.
Did You Know?
9 An oil platform uses
1,500km of cables.
9 A high-end car uses 5km
of cables.
9 A latest-generation
aircraft uses 650km
of cables.
9 And a cruise liner uses
3,000km of cables!
Nexans, the industry’s most complete range
From copper cathode -closely related to the basic copper ore - to 8mm machine wire the international standard used by all wire and cable manufacturers worldwide, Nexans controls
the whole cable development and manufacturing process, and mainly produces power and
telecommunications cables in over 90 plants on 5 continents.
Because copper is an excellent conductor, Nexans has used it to develop a wide range of cables.
The Group also manufactures aluminum cables for applications where saving weight is important,
e.g. in the aerospace industry. For local infrastructure networks, such as railways, power utilities,
telecoms…, Nexans provides fiber-optic solutions that are ideal for data and voice transmission.
Nexans offers the most complete range of cables and cabling systems in the industry. Our products
meet the highest requirements in terms of performance, quality and environment-friendliness. They
also comply with many international industry-standards.
Some records set by Nexans…
Longest cable in one continuous length: 125km
Deepest installed cable: 2,300m (below sea level)
Highest-voltage power transmission cable: up to 550,000V
Highest temperature resistance: 1,000°C (1,832°F) for several minutes
Thinnest cable (invisible to the naked eye): 12μm diameter (a human hair has a 70μm diameter!)
Heaviest cable: 135 kg/m…
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1 – Nexans, the worldwide leader in the cable industry
Formerly Alcatel Cables & Components, the successor to the over 100-year old Câbles de Lyon,
Nexans became an independent company in 2001, the year of its IPO at Euronext Paris
(Compartment B). In March 2005, the Alcatel Group sold its remaining share in Nexans’ capital.
Six years after its IPO, Nexans is now established as the worldwide leader in the cable and cabling
system industry, with about 8.5% of worldwide sales in a highly fragmented market, where the
world’s top 10 leading companies account collectively for only 20% of global sales. Since early
2007, Nexans has been listed on compartment A of the Eurolist of Euronext (Paris stock exchange).
Growing faster than the market
In 2007, on a comparable basis, at constant exchange rates and non-ferrous metal prices, Nexans’
cables activities increased by 12.1% over a global market with an annual growth of
2-3%. Since 2005, Nexans has been reaping the benefits of its profitable growth strategy. In 2007,
operating margin, as a percentage of sales, rose from 5.8% in 2006 to 8.5%, at constant metal
prices. Over the 2008-2009 period, and after scope changes which should result from the sale of
the harnesses business and the telecommunication copper cable business in Spain and the
acquisition of Madeco in Chile – the group is aiming for an average annual organic growth rate of
6% for its cable businesses, continuing to outstrip market growth as a result of its investments. This
should lead to a further increase of 7 to 10%, depending on economic conditions, of its operating
margin, as a percentage of sales and at constant non-ferrous metal prices. The group should also
continue to generate positive cash flow in the coming years.
With an industrial presence in over 30 countries worldwide, Nexans employs 22,000 people and
had sales in 2007 of 7.5 billion euros (4.8 billion euros at constant non-ferrous metal prices).
In order to serve the present and future product needs of its customers, and to stay at the forefront of
innovation, Nexans has established a team of 450 researchers, an International Research Center
based in Lyon (France) and Nuremberg (Germany), and eight Competence Centers throughout the
world.
Our core business: energy cables
With energy cables as its core, Nexans offers an extensive range of cables for the infrastructure,
industrial and building markets. Energy cables accounted for two-thirds of Nexans’ sales in 2007,
up 12.1% over the previous year on a comparable basis and at constant exchange rates.
Energy cables…
… High Voltage 60-550kV submarine, underground and overhead cables, used to
transmit large amounts of electricity from power plants over long distances across
mountains, deserts and ocean (Transmission).
… Medium Voltage 1-60kV cables which carry electricity from high voltage transformer
stations to urban areas (Distribution).
… Low Voltage (under 1kV) cables used to deliver power to end users inside buildings.
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Supported by national investment programs and major contract awards, revenue growth was
particularly strong in 2007 (up10.2%*),- mainly in land-based and submarine high voltage
cables. The ramping up of production at the new Japanese plant of Tokyo Bay (a company in
which Nexans has a majority interest alongside Viscas) in the second half of 2007 also largely
contributed to the second half year’s accelerated growth. Sales of accessories rose by almost
20% in 2007.
Sales of industrial cables in 2006 grew by 17.5% at constant consolidated scope and
exchange rates. Sales of special cables rose by 19.1% thanks to a marked increase in business
in the Group’s priority market segments, namely oil and gas, shipbuilding, railways and
robotics.
Finally, in the building cables market, Nexans recorded a growth of 10.4% at constant
consolidated scope and exchange rates. In Europe, volumes increased slightly in 2007, with
the exception of the German market where prices are very low. In North America, following a
sales recovery in the first half of the year, the American residential market suffered a sharp
downturn in the second half due to the subprime crisis. Nexans was only slightly affected as it
is mainly present in the industrial and commercial buildings market. The weakening of the US
dollar served to increase competition in Canada, making this market more attractive to US
producers. As a result, pressure was exerted on Nexans’ margins without undermining
profitability, which remained highly satisfactory in the second half of 2007.
Three specialty activities: energy infrastructures, industry and buildings
Nexans now focuses on three major markets covering various segments:
•
Infrastructure, including mainly power networks (Railways, Telecom networks,
Airports)
•
Industry, with equipment for the automotive, shipbuilding, railways, aerospace,
defense, oil and gas, nuclear, handling, windpower and automation industries
•
Building, including residential, industrial, public and office buildings
Nexans, the world’s largest private copper user
The Group uses approximately 850,000 tons of copper each year. The rise of copper prices is
reflected in the selling price of Nexans cables. It has therefore no impact on the Group’s
operating income.
* on a comparable basis, at constant exchange rates and non-ferrous metal prices
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Evolving complementary activities
Telecom infrastructures: 13.9% increase in LAN cables sales in 2007
Telecoms sales increased by 12% to 529 million euros at constant consolidated scope and
exchange rates compared with 2006. In a relatively stagnant market, Nexans benefited fully
from the mounting investment in railway infrastructures and high-speed LAN cables.
Sales of Telecom network cables in 2007 rose by 9.9% at constant consolidated scope and
exchange rates, boosted by the continuing high demand for optical fiber cables, particularly in
Europe.
In the LAN cables segment, Nexans achieved a 13.9% increase in sales at constant
consolidated scope and exchange rates by offering high value-added system solutions for the
high end of the market in Europe and the United States.
Electrical wires: capital optimization strategy implemented
In 2007, external sales of electrical wires decreased 33% to 502 million euros at constant
consolidated scope and exchange rates. Pursuing its policy of refocusing solely on its own
requirements, Nexans reduced the tonnages sold outside the group by an average of
approximately 45% in Europe and North America.
The reduction in business contributed significantly to the decrease in working capital
requirements in 2007.
2 – Nexans’ strategy
In a global economy where markets, technologies, customer needs and users change ever
more rapidly, Nexans introduced its new three-year strategic roadmap in 2007. The aim of
the new strategic roadmap for 2007-2009 is to make Nexans more profitable, less subject to
economic cycles, and specialized in a small number of highly synergetic activities. With energy
cables as its core, Nexans is therefore now focused on three specialty markets: energy
infrastructure, industry, and building.
This plan is in line with the existing strategy which has helped significantly to improve the
Group’s profitability over the last five years.
During the previous years, Nexans took a number of actions aimed at establishing long-term
profitability, investing in sustainable growth drivers, streamlining its production facilities,
reducing its fixed costs, developing a more aggressive procurement policy and gradually
refocusing on its cables business by selling non-core activities, i.e. by divesting part of its
enameled wires business in North America and Europe, and its distribution activities in
Norway and Switzerland.
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A targeted acquisition strategy
Nexans focuses on expanding both its product portfolio and its presence in high-potential
emerging countries.
During its six years as an independent listed company, Nexans has expanded through strong
internal growth along with highly targeted acquisitions. In this period, the Group acquired
eleven companies, which strengthened its position in key markets and its presence in dynamic
emerging countries.
Area
•....Chile - November 2007
Nexans signed a framework agreement to acquire the cables business
of the Chilean company Madeco. Payment for this acquisition will
consist of: 422 MUSD in cash and assumption of debt for a portion of
the shares of Madeco’s cable and wire subsidiaries and 2.5 million
newly-issued Nexans shares. This will give Madeco a stake in Nexans
of approximately 9% (based on 28.1 million shares). The completion
of the transaction is subject to the signing of a definitive agreement,
which is scheduled to take place in February 2008, as well as to
obtaining the approval of both companies’ and regulatory
authorizations. Closing is expected by mid-2008.
•....Australia – December 2006
Nexans acquired Olex, the cable industry leader in Australasia, for
312 million euros. This acquisition, the largest yet made by Nexans,
reinforced its leading position in its core business and doubled
its presence in the Asia-Pacific area.
•....South Korea – November 2006
Nexans increased its shareholding in Nexans Korea and Kukdong
Electric Wire, which the Group now controls at 99.5% and 97.9%
respectively, for a total amount of 42 million euros. In Korea, Nexans
is now the world’s leading cable supplier for the shipbuilding industry.
•....Vietnam – July 2006
Nexans set up a joint venture with Lioa, controlled 60% by Nexans.
Product
Portfolio
•
High Voltage Cables - July 2006
Nexans created a production joint venture with Viscas (NVC)
in Japan for submarine high voltage power cables.
•
Transmission Line Monitoring Systems - January 2007
Nexans completed the acquisition of The Valley Group, Inc (TVG),
the world leader in real-time thermal rating technology for
Overhead Power Transmission applications to provide reliable
power line monitoring for electric utilities. This strategic acquisition
expands the scope of Nexans’ role with electric utilities, from a
supplier of cables for overhead power lines to a provider
of optimized power transmission systems.
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Priority industrial market segments
After a thorough analysis of its industrial markets, Nexans identified, as part of its new
strategic roadmap, eight particularly dynamic and high-value business segments on which the
Group should focus its growth efforts. They include the automation, automotive, shipbuilding,
aerospace, as well as railway equipment, material handling, petrochemical and nuclear
industries.
Focus on the manufacturing of high value-added, innovative cables
High value-added products accounted for 40% of the Group’s sales in 2007. Under the new
strategic roadmap for 2007-2009, the total share of these products is expected to reach 50%
of global sales by the end of 2009.
High Voltage submarine cables
For forthcoming very large-scale projects, such as the interconnection of cross-border power
networks, the powering of offshore oil platforms from shore or the extraction of gas at very
high depths, Nexans has a major asset, namely its ability to design, produce and install
submarine cables. These cables have unique properties in terms of power, length and
resistance to corrosion, extreme pressure, mechanical stresses during installation, etc.
In this market which increased by 20.5% in one year, Nexans has won several major projects,
among which a 146 million euros order from Red Electrica de Espana (REE) for a 240 km long
high voltage submarine power link between mainland Spain and the Balearic Islands.
Nexans has also won the manufacturing of the deep water section of NorNed, the world
longest submarine power transmission link power grids of Norway and the Netherlands. This
order, worth around 51 million Euros includes the manufacturing of two 156 km deep-water
cables, as well as a shorter length of cable to bring the link ashore in Norway. The NorNed
link is expected to enter service in early 2008.
Other orders included projects in Saudi Arabia-Bahrain, Thailand, Norway, etc.
Nexans has made significant investments in this market by increasing the production capacity
of its Halden plant in Norway and by acquiring a new production unit to increase its
submarine high voltage power cable production volume by one third through a joint venture
with Viscas in Japan.
The latest contracts signed by Nexans include:
•
September 2007: Nexans won a 146 million euros order from REE, the owner and
operator of the largest part of Spain’s power transmission grids, for a high voltage
submarine link between mainland Spain and the Balearic Islands. Nexans will
manufacture, transport and install a high voltage – 250kV, 500 MW – DC submarine
power link as part of the COMETA (Conexion Mediterranea de Transporte de Alta
Tension) project.
•
March 2007: Nexans won a 35 million euros high voltage underground power cable
contract for Shanghai. The world’s first intra-city 500kV cable connection will be
installed in a 17km tunnel under Shanghai City.
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•
February 2007: Nexans was awarded a contract worth 140 million euros by the EHV
Power Transmission Chinese Company of CSG, and Guangdong Nan-Dian Power
Equipment Co, to manufacture and install a 500kV submarine power link to connect
Hainan Island at the south end of China to the Chinese mainland in Guangdong
province.
Nexans’ expertise in submarine cables is supported by company-owned or companycontrolled tools and machines specifically designed for high depths—including Uflex, a
software package developed in-house for the accurate prediction of the behavior of complex
umbilicals, and the Spider dredger—or for the transportation of very long cables, such as the
Skagerrak cable-laying vessel with world-leading performance.
Superconducting cables
As power utilities are put under heavy strain, superconducting technology is being considered
by electricity providers as a new means to increase the capacity and reliability of their systems.
Superconducting cables can carry three to five times more power than conventional cables.
With much lower impedance and resistance than standard technologies, they can be installed
at strategic locations in an electrical transmission or distribution system in order to offload the
burden on traditional cables and overhead power lines, easing congestion in networks
•
LIPA Project. The Long Island Power Authority (LIPA) has officially started in 2007 the
construction phase of the world’s largest and highest-voltage superconductor electric
transmission cable system. The 138kV cable system, nearly one-half mile in length
(600 meters), will be the world’s first superconductor cable installed in a live grid at
transmission voltages and will carry more power than all previous high temperature
superconductor (HTS) cable demonstrations combined.
Connection to the American grid is scheduled mid-2008
Telecom cables
Nexans has decided to add LAN cables to its core business. The innovative capabilities the
Group has shown over the last two years both in systems and high-speed cables are very
positive for the future development of these businesses.
Nexans is also developing its expertise in the field of fiber optics, to meet growing needs of
ultra-fast data, television signals and telecommunications transportation links. The group
participates to the construction of physical infrastructure for Fibre-to the-home (FTTH) projects.
The city of Stockholm, for example, will use Nexans equipment for the planned expansion of
the city’s wide area network (WAN). Nexans has also recently laid a submarine fibre-optic to
provide ultra-fast data transmission between two German towns across Lake Constance.
Nexans’ international operations
Europe: second consecutive year of very high growth
In 2007, Cables business sales totalled 2.96 billion euros, an increase of 13.9% on a like-forlike basis and constant metal prices and exchange rates compared with 2006. Operating
margin rose from 144 million euros in 2006 at constant exchange rates to 264 million euros
in 2007.
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Growth was particularly strong in high-voltage cables and industrial cables, segments in which
the Group is concentrating its development efforts. This growth was accompanied by
increased profitability. Building cables maintained steady volumes and profits boomed in
2007.
North America: growing demand for high value-added cables
In North America, cable business sales totaled 422 million euros, an increase of 5.4%
compared with 2006 at constant consolidated scope and exchange rates.
Operating margin for cable businesses was 72 million euros in 2007.
The housing market crisis in America had little impact on Nexans due to the Group's low
exposure to this segment in the USA. The depreciation of the US dollar against the Canadian
dollar on the other hand gave US producers a competitive edge. Profit margins have shrunk
but remain satisfactory. Nexans is keeping a close eye on this market's development.
In the data cables sector, the new 10 Gbit/s cables have been an out-and-out success.
Asia-Pacific: more than 50% growth in China and profitability objectives fully met
by Olex (EBITDA equal to 14% of sales at constant non-ferrous metal prices)
Since January 1st, 2007, sales for the Asia-Pacific region have included Olex's contribution
which totalled 284 million euros in 2007.
Cable business sales for the region amounted to 564 million euros in 2007 (at constant metal
prices). At the scope of consolidation prior to the acquisition of Olex, organic growth
amounted to 14.2%.
Operating margin for the area's cable businesses jumped from 15 million euros in 2006 to 49
million euros in 2007 (at constant exchange rates). The increased profits were due in
particular to a qualitative pricing policy and the expansion of industrial capability in China
and South Korea which enables the Group to take advantage of the boom in the industrial
and electronic cables market.
Rest of the World: booming markets and increased industrial capacity
Sales for the Rest of the World region amounted to 374 million euros in 2007, an increase of
14.5% compared with 2006 (at constant consolidated scope and exchange rates).
In 2006 and 2007, all the countries in this region reaped the benefits of the high level of
investment enabling them to take advantage of the booming markets. Nexans in particular
strengthened its positions in Industry (Brazil, Turkey, Morocco) and in Infrastructure (Lebanon,
Egypt).
3 – The customer, central to Nexans’ organization
During the past two years Nexans has structured its organization to place the customer at the
center of the company. The goals are to develop a better understanding of customer
expectations, reduce time-to-market for new products, develop new services, and to eventually
establish a truly close and mutual trust relationship.
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Multidisciplinary task forces – a better way to meet customers’ expectations
These task forces bring together researchers, product marketing managers and large accounts
around a common project or customer. They have intimate knowledge of their customers’
applications, manufacturing processes and future needs in cables and cabling systems. They
are the best intermediaries to explain and formulate these needs to the research teams
in charge of building future prototypes.
This approach allows Nexans to strengthen its role as a supporting partner for its customers,
to adapt its development programs efficiently to serve customers’ projects and expectations,
and to design and successfully implement joint development efforts with large accounts to
ensure that innovations match their specific needs. Such projects use digital simulation tools
to promote the exchange of information and ideas between companies and to shorten
prototype development cycles.
Dedicated application centers
For its customers, Nexans has created high-performance application centers, located near its
Competence Centers in its major European production plants. Their purpose is to:
• Reproduce the systems and networks belonging to existing and prospective customers
with their own unique characteristics, make accurate diagnostics, and offer alternative
solutions optimized with the support of the Group’s engineers and technicians;
• Assess the performance and test the resistance of cables to extreme conditions (torsion,
weight, acceleration, temperature, etc.).
Application centers have been operating in Europe since January 2006:
• The Automation Application Center in Nuremberg (Germany) tests the endurance of
cables designed for robotic applications, production lines, control equipment or
sensors. It serves the needs of a mostly European market, estimated at 1 billion euros
with 5-7% annual growth.
• The Handling Application Center in Lyon (France) helps all its customers, especially
partners from Asia, to prepare for the 6-10% annual growth expected in the industry
for the forthcoming years by choosing Nexans cables. This center tests parameters
such as tensile strength, in order to extend the lifespan of lifting cranes and ensure the
safety of both staff and goods.
These application centers work in close collaboration with Nexans’ eight Competence Centers
and the International Research Center.
4 – Leading edge research and innovation facilities
Nexans’ continuous goal is to maintain its staff at the forefront of world technology in its
industry. In 2007, the Group invested 60.2 million euros (vs 54.6 in 2006) in Research and
Development in order to further improve the quality and technical compatibility of its products
and reduce their time to market. 450 engineers and technicians are dedicated to research
within the Group, which holds over 420 patent families.
Industry-leading International Research Center
With international teams from the best universities distributed between the Lyon
and Nuremberg facilities, Nexans’ International Research Center (NRC) implements advances
in fundamental research and focuses mainly on the study and enhancement of cable
components, including sheathing, conductors and insulators.
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A little clay goes a long way
Adding just a few percent of clay (5% maximum) to polymer sheathing is sufficient to lower the
propagation of fire, smoke and toxic gases, while allowing cables to continue delivering
energy and data for evacuation and fire-fighting. This technology has given rise to Nexans’
ALSECURE PLUS family of data and energy products used for residential, tertiary and industrial
buildings.
The NRC works mainly in three key research areas:
• enhancement and development of properties of polymers used in insulating and
sheathing materials, in order to increase product reliability in complex or extreme
environments;
• fire resistance and performance of low and medium voltage cables;
• weight and volume savings, especially for the aerospace and automotive industries.
Eight specialized Competence Centers
Nexans’ applied research is conducted in eight global Competence Centers, focusing on the
Group’s core businesses and specializing in key products or technologies. Located both
in Europe and North America, the Competence Centers share their breakthroughs and best
practices over a secure intranet.
Specialties and locations of Nexans’ Competence Centers
High Voltage submarine cables
High Voltage extruded cable systems
Cabling systems
Metalworking
Energy cable accessories
Telecom components
Data transmission
Superconductors
Halden, Norway
Calais, France
Buizingen, Belgium
Lens, France
Erembodegem, Belgium
Bezons, France
New Holland, United States
Huerth, Germany
Innovation, a second nature for Nexans
Innovative products and services developed by Nexans to exceed customers’ expectations span
far beyond pure research. They also encompass assisted design, ready-to-install cabling
systems for ships, cars, aircrafts and trains, supply chain optimization, inventory management,
recycling, etc.
Supported by world-renowned universities and research centers
Nexans’ research teams partner and collaborate with the world’s most renowned universities
and research centers, attend international meetings about the Group’s key businesses and
industries, and play a leading role in the development of international standards.
Partnerships involve University of Chambéry (France), Ecole Polytechnique (Palaiseau, France),
INSA (Lyon, France), ENSAM (Paris, France), University of Cambridge (UK), CNRS-EPM
(Grenoble, France), Faculté Polytechnique de Mons (Belgium), IKV Universität Aachen
(Germany), Technical University of Eindhoven (Netherlands), University of Trondheim
(Norway), Queen University of Kingston (Canada), and Hochschule Mannheim (Germany).
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5 – Responsible, environment-friendly company
Preserving the environment, reducing the consumption of natural resources, using nonpolluting materials, facilitating product recycling: Nexans takes all these considerations into
account.
The Group’s environmental and safety policy is outlined in a Risk Management Charter signed
by the Chairman. It calls for a thorough analysis of the risks related to the Group’s products
and manufacturing processes, as well as employee training on good environmental practices
and a continuous improvement program incorporating production plant audits.
Limiting environmental impact, starting from product design
Nexans has already stopped using lead stabilizers in plastic and PVC sheaths, as well as
halogens and solvents. The Group also selects non-polluting, easier-to-recycle materials.
Over 60 people are dedicated to researching the polymers, plastics, and composites that go
into cable insulation and sheaths. In-depth research is performed to ensure the durability and
resistance of its products in challenging environments, such as large depths of water, extreme
climates, humidity, corrosion, flames, etc.
The Group also strives to use manufacturing processes that consume less energy and raw
materials while still maintaining the highest levels of quality, in order to reduce scrap, satisfy
customers, and build customer loyalty.
Nexans mainly invests in soil protection, gas emissions and air treatment, energy savings, and
waste and noise reduction.
In-depth environmental audits, and an in-house environmental label
The Group’s sites are monitored annually through an Environmental Survey based on ISO
14001 standards and regularly updated. Out of the 26 sites which participated in 2007 to the
continuous improvement program, 16 received ISO 14001 certification: 3 in France, 3 in
Germany, 3 in South Korea, 2 in Norway, 2 in Belgium, 2 in the US and 1 in Ireland.
Since 2003, Nexans has been implementing an EHP, “Environnement Hautement Protégé”
(Highly Protected Environment) label program to address the specific environmental risks
posed by the Group’s operations. The program includes a series of environmental audits
conducted by a company that specializes in this area; approximately 25 sites are audited every
year.
By the end of 2007, a total of 50 sites had been awarded the EHP label. The sites that were
not awarded the label received a list of recommendations, and have since undertaken
corrective actions. These actions are included in the plants’ 3-year plans.
Nexans , a pioneer in 100% recycling
For the last 40 years, Nexans has been collecting and recycling cable manufacturing waste
and cables at end of life. The company processed 21,993 tons of cable waste in 2007,
coming from most of the Group’s European plants, as well as 4,937 tons of used cables
collected directly from Nexans’ customers.
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6 – Proactive human resources policy
The human resources policy is among the priorities set by Nexans’ strategic roadmap.
The key targets set for all 22,000 employees include developing skills, encouraging mobility,
and reinforcing customer orientation.
A competitive and multicultural environment
Since 2005, Nexans has made recruitment one of its major growth drivers. “By joining
Nexans, you make a clear choice for your own career: an industrial Group, young but
experienced, ambitious, international and committed to reinforce its leadership on the
market. Confident in our innovative capabilities, combining organic growth and
targeted acquisitions, innovation and entrepreneurship are at the heart of our company
values. All employees are able to express their talents and potential in a competitive
and multicultural environment. Nexans sees each individual as the main value creator,”
according to Jacques Villemur, Nexans’ Senior Corporate Vice President Human
Resources.
Training: crucial for progress
Nexans’ current training program is designed to enable all employees to improve their
performance, develop their skills in order to contribute to the Group’s success, and to mobilize
around shared values, goals and methods.
In 2007, the number of training hours grew by 35%. Over half of Nexans’ employees
benefited from training programs.
A Career Management Committee in each country
Nexans has set up a Career Committee which will be gradually extended to all countries to
support annual career interviews conducted by local human resources managers. This new
tool will help to better meet employees’ aspirations and evaluate skills needed to drive the
Group’s present and future growth.
In Sweden, for example, 97% of Nexans’ employees have an individual assessment interview
every year.
Nexans University
In 2006, Nexans decided to create a Nexans University aimed at promoting the “Nexans
Way” internationally in all major fields of business management, including procurement,
communication, finance, legal, marketing, etc. Thanks to this in-house university, all Group’s
employees will benefit from common training sessions tailored to their specific environment.
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7 – Best practices in corporate governance
Since its listing on the stock exchange, Nexans has adopted a number of rules relating to
corporate governance with a view to ensuring transparency of information with respect to both
its directors and its shareholders.
Active Board of Directors, small Executive Committee
The Board of Directors is currently made up of thirteen members. They come from diverse
backgrounds and were selected for their expertise and experience in industry, banking, or
consultancy, enabling them to give informed opinions and advice in the best interests of the
Company. They include Gérard Hauser, Frédéric Vincent, Gianpaolo Caccini, Jean-Marie
Chevalier, Georges Chodron de Courcel, Jérôme Gallot, Jacques Garaïalde, Jean-Louis
Gerondeau, Colette Lewiner, François Polge de Combret, Ervin Rosenberg and Nicolas de
Tavernost. Among these 13 directors, 7 should be considered to be independent directors
following the recommendations of the Combined Viénot-Bouton Report of June 2003.
Moreover, the shareholders approved the election of a Madeco representative, Guillermo
Luksic Craig*, as Director for a 4 year term, subject to and with effect as of the closing of the
acquisition of Madeco’s cable business (scheduled for the third quarter 2008).
The Board of Directors had seven meetings during the 2007 fiscal year.
Nexans’ Executive Committee is comprised of ten members, including Gérard Hauser
as Chairman and Chief Executive Officer; Frédéric Vincent, as Chief Operating Officer;
Pascal Portevin as Chief Corporate Officer, Strategic Operations; Yvon Raak as Chief
Corporate Officer, Europe Area; Jacques Villemur as Senior Corporate Vice President Human
Resources; Michel Lemaire, as Executive Vice Presidente Asia-Pacific Area; Frédéric Michelland
as Chief Financial Officer; Patrick Noonan as Senior Corporate Vice President, General
Counsel; Wolfgang Bedorf as Executive Vice President Rest of the World Area; and Gordon
Thursfield as Executive Vice-President North America Area.
Close trust relationship with shareholders
Since its first listing, Nexans has striven to provide its shareholders with regular, complete, and
transparent information using a variety of means for different shareholder needs, including
an Annual Report, shareholders’ newsletters, economic and financial information available
on the Group’s website, shareholders’ meetings and on-site visits, information meetings for
analysts and investors, etc.
15
Press Backgrounder
Nexans shares are listed on the Euronext Paris stock exchange
• Eurolist Compartment A
• SRD (Deferred Settlement Service)
• ISIN: FR00000444B
• Face value: 1 euro
The dividend amount voted at the latest Nexans Shareholders’ General Assembly on April 10
the payment of a 2 euro per share dividend, a 67% increase compared to 2007.
Sales per geographical area
Sales per business segment
(At constant non-ferrous metal prices)
16
Press Backgrounder
2007 Key figures
(in millions of euros)
At constant non-ferrous
metal prices
2006
2007
4,442
4,822
Net sales
Net sales at constant exchange rates
(2007)
Operating margin
Operating margin (% of sales)
Net income attributable to equity holders of the
company
Diluted EPS (in euros)
4,373
4,822
260
5.8
241
409
8.5
189
8.93
6.67
Analysis of net sales and operating margin by geographical area,
excluding Electrical Wires
(in millions of euros)
Europe
North America
Asia-Pacific
Rest of the world
Sub-total Cables Businesses
Electrical Wires
Total Nexans
2006
2007
Net sales*
Net sales*
% change
organic growth
2,614
401
245
326
3,586
787
4,373
2,960
422
564
374
4,320
502
4,822
+ 13.9 %
+ 5.4 %
+ 6.6 %
+ 14.5 %
+ 12.1 %
- 32.8 %
+ 4.8 %
(*) At constant metal prices and exchange rates
17
Press Backgrounder
Net sales and operating margin by business segment
(in millions of euros)
Sales
at constant exchange rates and
non-ferrous metals prices
Energy
Telecoms
Other
Sub-total: Cable businesses
2006*
2007
% change
4,373
4,822
+10.27%
3,104
472
10
3,586
3,780
529
11
4,320
+21.8%
+12.1%
787
502
-36.2%
260
409
+57.3%
242
40
(18)
264
365
49
(14)
400
+50.8%
+22.5%
+51.5%
(4)
9
N/A
5.8%
8.5%
7.7%
8.2%
N/A
7.3%
9.7%
9.3%
N/A
9.3%
-0.5%
1.7%
Electrical wires
Operating margin
Energy
Telecoms
Other
Sub-total: Cable businesses
Electrical wires
Operating margin as % of
sales
Energy
Telecoms
Other
Sub-total: Cable businesses
Electrical wires
+20.5%
(*) taking into account segmentation changes occurring in 2007.
18