WINDS
OF
CHANGE
17 FEBRUARY 2021
01
02
03
04
05
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
might occur in particular in the
context of further waves of the
coronavirus pandemic;
industry which has led our
customers to revisit their order
books for the coming months
and years;
and for imposing changes to
the agreed delivery schedules
for contracted projects in the
context of the coronavirus
pandemic.
– The inherent risks associated
with major capital projects,
particularly the risk of
completion delays and the risks
of delays to win projects to fill
the new capacities. These risks
notably concern the construction
of a new subsea cable laying
ship, the transformation of
the Charleston plant in North
America to produce subsea high
voltage cables, two projects that
will be instrumental in ensuring
that we meet our objectives;
Without having major
operational impacts, the two
following uncertainties may
have an impact on the financial
statements:
SAFE HARBOUR
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 visit
the Group’s website where
they can view and download
the 2020 annual results press
release as well as the 2020
financial statements and
Nexans Universal Registration
Document, which includes a
description of the Group’s risk
factors.
In addition to the risk factors
described in Section 3.1 of the
2020 Universal Registration
Document, the uncertainties for
2021 mainly include:
– The impact of protectionist
trade policies globally, as well
as growing pressure to increase
local content requirements;
– Geopolitical and political
instability, particularly in certain
countries, cities or regions such
as Qatar, Libya, Lebanon, Iraq,
the Persian/Arabian Gulf, Hong
Kong, Ivory Coast and Nigeria;
– The instability of banking
system in Lebanon and
uncertainties on the Lebanese
pound;
– The impact that the
coronavirus pandemic and the
adoption by State authorities,
in many countries around the
world, of national restrictive
measures (including prolonged
measures to control the
pandemic such as travel bans,
curfews and country lockdowns)
in particular in the context of
further waves of the pandemic
in countries around the world
together with the appearance
of variants to the coronavirus
(including in UK, Brazil and
South Africa) could have on
our Group’s business prospects,
operating profit and financial
position;
– The increase in credit risk
in certain countries (including
Brazil, Morocco and Turkey) in
the context of the coronavirus
pandemic;
– Political, social and economic
uncertainty in South America,
such as in Brazil, Venezuela and
Bolivia, which is i) affecting the
building market as well as major
infrastructure projects in the
region (such as the Maracaibo
project in Venezuela), ii)
creating exchange rate volatility
and iii) increasing the risks of
customer default;
– A marked drop in non-ferrous
metal prices resulting in the
impairment of Core exposure
(non-ferrous metal owned by
Nexans and integral part of
the production chain), not
having an impact on cash or
operating margin, but impacting
net income. Such marked drop
in non-ferrous metal prices
– In the current context of
marked increase in nonferrous metal prices, should
this increase trend continues
it might have on impact of the
non-ferrous market which could
potentially lead to rarefaction of
non-ferrous metal offers;
– 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;
– 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;
– The impact of the coronavirus
pandemic on the aeronautic
– The fact i) that automotive
sales may continue to be
adversely affected in the context
of the coronavirus pandemic
on a global basis with issues in
components supplies and slower
recovery of the cars demand,
as well as that ii) the progress
of electrical propulsion solutions
will penetrate markets slower
than predicted;
– Fluctuating oil and gas prices,
and the downturn in the Oil &
Gas sector which have lead
Oil & Gas sector customers to
revise their exploration and
production capex programs.
The considerable uncertainty
about the implementation
of these customers’ capex
programs may also affect the
Group’s ability to plan for future
means of producing cables and
umbilicals for these customers,
– The risk of the award or entry
into force of subsea and land
cable contracts being delayed
or advanced, which could
interfere with schedules in a
given year;
– 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, 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 (such as Philippines
for Visayas-Mindanao project);
– The challenges created by
the coronavirus pandemic
(with subsequent measures
taken by national States such
as country lockdowns or travel
bans) for the performance of
projects in countries like the
United States (e.g. to meet
the defined manufacturing
schedule in Charleston) as well
as for turnkey projects such as
Seagreen (United Kingdom) and
Visayas-Mindanao (Philippines)
and onshore projects in Europe.
– Sudden changes in metal
prices that may affect customers’
buying habits in the short term;
– The impact of foreign
exchange fluctuations on the
translation of the financial
statements of the Group’s
subsidiaries located outside the
euro zone.
Scenarios considered in the
current presentation will be
further analyzed prior to
deciding their implementation
and projects resulting from those
studies will be submitted to
relevant legal bodies including
to employees’ representative
bodies if applicable and when
needed.
INVESTOR RELATIONS:
Contact: Aurélia Baudey-Vignaud
Telephone: +33 1 78 15 03 94
Email: aurelia.baudey-vignaud@nexans.com
002
@2021 Nexans CMD presentation
01
INTRODUCTION
02
03
04
05
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
INTRODUCTION
FOCUS ON THE
WORLD’S
ELECTRIFICATION
003
@2021 Nexans CMD presentation
01
INTRODUCTION
EDISON PATENTED THE
FIRST COM MERCIALLY
SUCCESSFUL BULB
004
1880
1890
03
04
05
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
120
1879
1870
02
1900
2001
YEARS’
2018
NEW
NEX ANS
NEX ANS
IPO
INDUSTRIAL COMPANY
Nexans is at the
heart of electricity
and pioneer of its
deployment
1910
1920
1930
1940
1950
1960
1970
1980
1990
2000
2010
2020
2030
2040
2050
@2021 Nexans CMD presentation
0
01
INTRODUCTION
02
03
04
05
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
ELECTRIFICATION
IS IN OUR
DNA
It is at the heart of our existence.
It is the reason why we give the
best of ourselves to build a better
future for the world.
1990
2000
005
2010
2020
2030
2040
2050
ELECTRIFY
THE
FUTURE
@2021 Nexans CMD presentation
01
INTRODUCTION
OUR
PURPOSE
006
ELECTRIFY
THE
FUTURE
02
03
04
05
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
Our past, present
and future converge
to electrification
@2021 Nexans CMD presentation
01
INTRODUCTION
OUR
VALUES
007
02
03
04
05
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
WE ARE PIONEERS
OF ENERGY TRANSITION.
WE ARE DEDICATED
TO DELIVERING TO THE HIGHEST
STANDARDS OF PERFORMANCE.
WE ARE UNITED
TO ACHIEVE OUR AMBITIOUS
GOAL: ELECTRIFY THE FUTURE.
@2021 Nexans CMD presentation
01
INTRODUCTION
02
03
04
05
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
A
COMMITMENT
CARBON
NEUTRAL
COMPANY
BY 2030
OUR
008
@2021 Nexans CMD presentation
01
INTRODUCTION
OUR
STRATEGY
009
02
03
04
05
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
SIMPLIFY
OUR BUSINESS
TO AMPLIFY
OUR IMPACT
@2021 Nexans CMD presentation
01
INTRODUCTION
02
03
04
05
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
FROM
SOLUTIONS
OF ENERGY,
GENERATION
OF ENERGY,
TO TRANSMISSION
OF ENERGY,
TO DISTRIBUTION
OF ENERGY
TO USAGE
OUR
010
@2021 Nexans CMD presentation
01
INTRODUCTION
02
03
04
05
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
OUR
PURPOSE
ELECTRIFY THE FUTURE
OUR
PATH
OUR
VALUES
WE ARE PIONEERS OF
ENERGY TRANSITION.
WE ARE DEDICATED TO
DELIVERING TO THE HIGHEST
STANDARDS OF PERFORMANCE.
WE ARE UNITED TO ACHIEVE
OUR AMBITIOUS GOAL:
ELECTRIFY THE FUTURE.
OUR
STRATEGY
SIMPLIFY
OUR BUSINESS
TO AMPLIFY
OUR IMPACT
OUR
SOLUTIONS
VALUE GROWTH
BY FOCUSING ON
ELECTRIFICATION
OUR
COMMITMENT
A CARBON NEUTRAL
COMPANY BY 2030
FROM GENERATION OF ENERGY,
TO TRANSFORMATION OF ENERGY,
TO DISTRIBUTION OF ENERGY,
TO USAGE OF ENERGY
011
@2021 Nexans CMD presentation
01
INTRODUCTION
WHAT IS
ELECTRIFICATION?
02
03
04
05
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
Distributed generation
(Utility scale)
Distributed generation
(Private)
Offshore wind
Residential
Onshore wind
Datacentres
Solar
Infrastructures
Hydro
Industrial
Centralised
generation
Nuclear
Transmission
subsea and land
Distribution
Commercial
Mobility
Fossil
GENERATION AND TRANSMISSION
012
Usages
DISTRIBUTION
USAGES
@2021 Nexans CMD presentation
01
05
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
LO
RE
D
E
Y
ENVIRONMENT
MANAGEMENT
RN
O
FINANCIALS
E
3
EN
3
INCLUSION
AND DIVERSITY
SAFETY
LEARNING
RN
ON
COMPETITIVENESS
4
2
TU
4
GAGEMEN
1
RE
3
T
ENVIRON
4
INNOVATION
MIC
LOW CARBON
OFFER
3
M
2
PLOYED
L EM
CLIMATE
EC
T
N
E
TA
2
CUSTOMERS
NO
RETURN O
NC
AR
BO
1
PI
1
CA
CIRCULAR
ECONOMY
COMMITTED
TO PERFORM
013
TU
N
P
04
O
E
3
M
03
N
A LICENCE
TO OPERATE
E
INTRODUCTION
02
SUPPLIER
ENGAGEMENT
COMPETENCE
A
G
EN
D
E
G
@2021 Nexans CMD presentation
01
INTRODUCTION
WINDS
OF
CHANGE
FROM:
2020
02
03
04
05
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
TO:
Nexans will simplify to amplify its role
as Electrification Pure Player
Nexans is historically a 6 Billion Euro generalist
covering 8 macro sectors offering mainly components
A €6bn COMPANY
SUPPORTED BY
34
2020
Buildings
Territories
Industry
4
Harnesses
Telecom
Network
OTHERS
MACRO
SECTORS
12
SUBSECTORS
Sales:
014
A COMPANY
SUPPORTED BY
45%
Subsea
Grid
55%
Inland
Grid
Generation & Transmission
Distribution
Usage
SUBSECTORS
Metallurgy
Sales:
ELECTRIFICATION
€6bn
2024
8
MACRO
SECTORS
2024
100%
ELECTRIFICATION
@2021 Nexans CMD presentation
01
INTRODUCTION
02
03
04
05
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
TIME TO
MAKE
CHOICES 02
03
015
WHY
CHANGE?
An increasingly
electric world
WHAT
TO CHANGE?
Simplify our business.
Amplify our impact.
04
05
HOW
TO CHANGE?
Transform
and innovate
NEW FINANCIAL
TRAJECTORY
Scale-up to
step-up performance
@2021 Nexans CMD presentation
01
INTRODUCTION
02
WHY CHANGE?
03
04
05
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
WHY
CHANGE?
AN INCREASINGLY
ELECTRIC WORLD
016
@2021 Nexans CMD presentation
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02
INTRODUCTION
WHY CHANGE?
03
04
05
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
2021 TO 2050 THE WORLD WILL BECOME ELECTRIC AND CARBON NEUTRAL.
ONLY A DECADE TO MAKE THE BIG SHIFT
POPULATION
GROWTH
ELECTRICITY
DEMAND
$2 TRILLION
RENEWABLE
ENERGIES
017
– Data source: Roland Berger
ELECTRICITY DEMAND
(MWH/CAPITA)
11,763
EUROPE GREEN DEAL
2,707
$1tn investments over next 10 years
RENEWABLE CAPACITY
(GW)
2040
2030
CARBON-NEUTRAL
2019
2000
2040
2030
2019
1975
2050
2030
2020
843
1.4
4.1
1975
WORLD POPULATION
(BILLION PEOPLE)
$2tn to achieve 100% clean energy
& net-zero emissions at latest 2050
$1 TRILLION
7,037
3.8
3.5
4.4
9.7
8.5
7.8
BIDEN PLAN
CHINA GREEN DEAL
China to be carbon-neutral state by 2060*
*On September 22 at the UN headquarters, President Xi Jinping announced a plan to
make China a carbon-neutral state by 2060 and to reach an emissions peak by 2030
@2021 Nexans CMD presentation
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INTRODUCTION
ELECTRIFICATION
02
WHY CHANGE?
03
04
05
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
RISKS RISE FASTER THAN SOLUTIONS. ACTION IS NEEDED
MAJOR
UPCOMING RISKS
FIGHT GLOBAL WARMING & BIODIVERSITY ATTRITION
AVOID BLACKOUT IN BIG CITIES
GUARANTEE END USERS ELECTRICAL SAFETY
NEW NEEDS
NEW STAKES
GREEN DEAL NEEDED
GRID MODERNISATION NEEDED
ELECTRICAL SAFETY NEEDED
IMPACTING THE
ELECTRIFICATION
018
– Data source: Roland Berger
€7 TRILLION
30 YEARS
1 FIRE EVERY 2 MINUTES
Investments in energy transition by 2030
Life time of a cable
caused by an electrical origin in the EU
X4.3
+40 YEARS
UP TO 80% OF FIRES
Renewable capacity between 2019 and 2040
Average age of grids in Europe & North America.
are triggered by counterfeit cables in emerging area
GENERATION
AND TRANSMISSION
DISTRIBUTION
USAGES
@2021 Nexans CMD presentation
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02
INTRODUCTION
WHY CHANGE?
03
04
05
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
Early
Mid
Early
ds
:
Mid
2020
Electrical
Equipment
OEMs
Cable
Manufacturers
ES
BL
CA
Automotive
OEMs
Ba
sic
Cu
sto
me
rn
ee
Early
2010
CLIENTS DEMAND
SOLUTIONS
NOT (ONLY)
COMPONENTS
NT
ME
GE
NA
MA
EM
NS
ST
IO
SY
AT
T
ER
EN
OP
EM
AG
AN
ES
TM
SE
VIC
AS
ER
ES
BL
CA
2000
Client needs are changing to face
these challenges, and the cable
industry needs to shift from products
to sub-systems & services
So
ph
isti
ca
ted
NEW CHALLENGES LEADING
TO NEW CLIENT NEEDS
(World value including
accessories and assembly)
€220bn
€120bn
Telecom
OEMs
Consumer
Electronics
OEMs
019
– Data source: Nexans internal analysis
@2021 Nexans CMD presentation
01
INTRODUCTION
02
WHY CHANGE?
03
04
05
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
REMAINING A GENERALIST
WILL BE A WEAKNESS NOT A STRENGTH
EVOLUTION OF MARKET DEMAND…
…CANNOT BE MATCHED BY A GENERALIST
• Differentiated products
• Inability to lead innovation on all segments
• Combination of sub-systems, services and software
• Product portfolio too large to focus on system development
• Sector specific skills
• Larger but shallower skillset
• Long-standing partnerships
• Spread customer base
• Investments focused on Innovation and scale
• Fragmented investments
020
@2021 Nexans CMD presentation
01
02
INTRODUCTION
WHY CHANGE?
03
04
05
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
REINVENT OUR MODEL
TO TRANSFORM CUSTOMER EXPERIENCE
FROM: VOLUME GROWTH FOCUS
TO: VALUE SCALE FOCUS
Exhaustive coverage of markets
01.
Deep understanding
of clients markets
Do-it-all cable range
02.
Build up high added
value solutions
Cable + Sub-systems
& services
03.
Invest to scale
up and innovate
Focused value
scale investments
Diluted maintenance &
growth investments
021
SWITCH FOCUS FROM COMPLEXITY
MANAGEMENT TO CLIENT INTIMACY
Global expertise
of one ecosystem
@2021 Nexans CMD presentation
01
INTRODUCTION
02
WHY CHANGE?
03
04
05
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
ELECTRIFICATION PURE PLAYER
ENGINEERING A NEW MODEL
By positioning ourselves as an electrification
pure player, Nexans will combine market focus,
scale effect and a specialist customer intimacy
with our global client reach, typical of a major
cable generalist.
AMPLIFY
Electrification Portfolio
This unique positioning enables us to scale up
offers and specialize assets on an ecosystem that
will represent more than 65% of the total cable
business in 2030, while providing an end-to-end
management of the electrification challenge.
SIMPLIFY
Markets Coverage
FOCUS
Resources
– M&A
– Product range
– CAPEX
– Innovation
– Industrial assets
– Management
– Selective organic growth
– R&D
GLOBAL
>3 regions
REGIONAL /
LOCAL
1 or 2 regions
ELECTRIFICATION
PURE PLAYER
CABLE
GENERALIST
SEGMENT
SPECIALIST
022
– Data source: Nexans internal analysis
@2021 Nexans CMD presentation
01
INTRODUCTION
02
WHY CHANGE?
03
04
05
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
ELECTRIFICATION PURE PLAYER
ENGINEERING A NEW MODEL
#01
#02
A HUGE ELECTRICITY
BOOM TO COME
REQUIRING SELECTIVITY
A NEED FOR SYSTEMS
AND SOLUTIONS
ENABLED BY AN
ECOSYSTEMIC VIEW
023
#03
A NEED FOR
GLOBAL REACH
IN A FRAGMENTED
MARKET OFFER
ELECTRIFICATION
PURE PLAYER
@2021 Nexans CMD presentation
01
02
INTRODUCTION
WHY CHANGE?
03
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
WHAT TO
CHANGE?
SIMPLIFY
TO AMPLIFY
024
@2021 Nexans CMD presentation
01
02
INTRODUCTION
WHY CHANGE?
01
02
025
03
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
SIMPLIFY
OUR BUSINESS
Focus on electrification
AMPLIFY
OUR IMPACT
Pursue transformation
and value growth
@2021 Nexans CMD presentation
01
02
03
INTRODUCTION
WHY CHANGE?
WHAT IS THE NEXANS
WE WISH TO SIMPLIFY?
WHAT TO CHANGE?
METALLURGY
Wind turbine
internal cabling
TA
L
LU
RG
Y
Pumps, generator
& drives
Solar LV
cabling
O&G
downstream
Rolling
Stock
Handling
Nuclear plant
internal cabling
O&G
Upstream
Shipbuilding
Medical
Other gen.
internal cabling
Mining
Railway
Electrical
appliances
Generators
Cabling
Resources
Transport
Industry
20
USTR
Y
N
ATIO
ELECTRIFIC
& SOLUTIONS
Aerospace
%
TELECOM
Interconnections
Transmission
NEXANS SCALING PLAYGROUND
Distribution
Network
Mobility
Distributed
Generators
Data Centres
Power Cables
Distribution
Usages
M
CO
E
L
TE
55
%
7
%
Submarine
Telecom
Telecom infra.
Fibre
Data Centers
- Data Cables
Antennas
Offices
Transmission
026
Automation
Infrastructure
Onshore
Renewable Farms
Generation
NEXANS
SALES
2020
Automotive
Harnesses
IN D
Residential
Other Centralised
Generators
NEW FINANCIAL TRAJECTORY
INDUSTRIAL SERVICES & PROJECTS
ELECTRIFICATION
Offshore
Wind Farms
HOW TO CHANGE?
%
ME
Industrial
05
18
Nexans 2020 split of sales
at constant metal price
Commercial
04
Local Systems
@2021 Nexans CMD presentation
01
02
03
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
3 REASONS TO SIMPLIFY OUR BUSINESS
BY FOCUSING ON ELECTRIFICATION
A tremendous organic & inorganic growth potential
#01
IN 2019, ELECTRIFICATION
REPRESENTED ABOUT 65%
OF THE WORLD CABLE MARKET
Cable Market:
Electrification
€236bn
€154bn
#02
THANKS TO STRONG MEGATRENDS,
CAGR WILL BE ABOVE OTHER
SEGMENTS ON THE PERIOD
#03
Number of manufacturers Totalling>40% of Market Share:
(in number of manufacturers)
2019-2030 CAGR (in %)
€156bn
4.3%
€99bn
3.4%
3.6%
>25
€39bn
Telecom
€27bn
Industrial
(Inc. Harnesses)
€28bn
2019
027
ELECTRIFICATION AS A SEGMENT IS
STILL FRAGMENTED AND OFFERS A
LARGE M&A PLAYING FIELD
– Data source: Nexans internal analysis
€40bn
2030
Electrification
Telecom
Industrial
(Inc. harnesses)
Electrification
4
5
Telecom
Industrial
(Inc. harnesses)
@2021 Nexans CMD presentation
01
02
INTRODUCTION
WHY CHANGE?
01
02
028
03
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
SIMPLIFY
OUR BUSINESS
Focus on electrification
AMPLIFY
OUR IMPACT
Pursue transformation
and value growth
@2021 Nexans CMD presentation
INTRODUCTION
WHY CHANGE?
MANAGEMENT FOCUS
FOCUS ON
ELECTRIFICATION
WHILE PUSHING
ONE STEP FURTHER
THE FULL GROUP
TRANSFORMATION
PROGRAM
Pursue our
transformation
programs on
ALL SEGMENTS
02
03
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
TRANSFORM OUR
OPERATIONAL MODEL
Pay our performance Debt
Business Unit Portfolio Management 1.0
Business Unit Portfolio Management 2.0
Cost reduction & efficiency initiatives
SHIFT
2018
Amplify & accelerate
our growth in value on
ELECTRIFICATION
SEGMENTS
2019
2020
2021
2022
MANAGEMENT FOCUS
AMPLIFY VALUE
GROWTH
01
2023
2024
TRANSFORM OUR POSITIONING
Change playing field to grow value
M&A - Divestments
SHIFT PRIME
SCALE VALUE UP
as an electrification
pure player
Innovation & Ecosystemic Partnerships
029
@2021 Nexans CMD presentation
PURSUE OUR
TRANSFORMATION
PROGRAMS ON
ALL SEGMENTS
Pursue our
transformation
programs on
ALL SEGMENTS
02
INTRODUCTION
WHY CHANGE?
MANAGEMENT FOCUS
AMPLIFY VALUE
GROWTH
01
03
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
TRANSFORM OUR
OPERATIONAL MODEL
Pay our performance Debt
Business Unit Portfolio Management 1.0
Business Unit Portfolio Management 2.0
Cost reduction & efficiency initiatives
SHIFT
Amplify & accelerate
our growth in value on
ELECTRIFICATION
SEGMENTS
2019
2020
2021
2022
MANAGEMENT FOCUS
2018
2023
2024
TRANSFORM OUR POSITIONING
Change playing field to grow value
M&A - Divestments
SHIFT PRIME
SCALE VALUE UP
as an electrification
pure player
Innovation & Ecosystemic Partnerships
030
@2021 Nexans CMD presentation
01
02
03
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
NEXANS TRANSFORMATION MODEL 2.0
HUGE VALUE CREATION POTENTIAL ON THE EXISTING PORTFOLIO
#01
BUSINESS PORTFOLIO ANALYSIS
– AN UPDATED PERSPECTIVE
BY DRIVING STRONG VALUE CHAIN MOVE
ON OUR INNOVATION DRIVERS
Our portfolio management model keeps the same spirit and principles while improving itself along side 2 axis:
– The matrix axis will display a stronger focus on cash generation trough CCR
which represent our capability to convert EBITDA in Free Cash Flow
– A new category is introduced: Innovation Drivers
– Increased thresholds to raise targets
EBITDA %
Innovation Drivers
CUSTOMERS
NEXANS
–
–
–
–
– Improved customer loyalty
– ROCE and cash conversion improvement
(at ISO revenues)
– Synergies between services & hardware
Productivity and cost efficiency improvement
Optimization of project Capex
Reduction of Opex (e.g. smart inventory)
Guarantee of safe & reliable products
#02
BY TRANSFORMING THE REMAINING
UNITS WITHIN THE GROUP
0%
Strategic Investments
Profit Drivers
Transformation Candidates
Sales
EBITDA
Value Burners
FCF
Cash Conversion Ratio (%)
031
@2021 Nexans CMD presentation
01
02
INTRODUCTION
WHY CHANGE?
03
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
NEXANS TRANSFORMATION MODEL 2.0
A SYSTEMIC AND UNIQUE VALUE CREATION PROCESS
Nexans is today segmented into about 30 business units
each with their own financial statements, manufacturing
units and client portfolios. These units are managed trough
a portfolio approach based on financial KPI’s.
They are brought through a standardized transformation
process which covers cost structure, business model
engineering and offer engineering to maximize value
creation and reach upper range financial ratios.
EXAMPLE
LEVERS
SEQUENCE 3
VALUE
BURNER
WORK IN PROGRESS
COMPLETED
TRANSFORM.
CANDIDATE
PROFIT
DRIVER
INNOVATION
DRIVERS
L23-31 – Innovation, Solutions
SHIFT Prime
10 Levers
L22 – Brand Prime
L21 – Superior service offer
L6 to 20...
SEQUENCE 2
SEQUENCE 1
032
L5 – Cash Conversion Pool
SHIFT Performance
L4 – Portfolio reegineering
20 Levers (250 pages
handbook,15 tools)
L3 – Complexity reduction
Restructuration
L2 – Lean Management
L1 – Fixed costs reduction
@2021 Nexans CMD presentation
01
02
INTRODUCTION
WHY CHANGE?
03
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
BUSINESS UNIT PORTFOLIO MANAGEMENT 2.0
OUR 2024 AMBITIONS
BUILDING BUSINESS UNITS PORTFOLIO
TURNOVER EVOLUTION PER PERFORMANCE CLUSTER
2021E
Innovation Drivers
EBITDA %
Building
2024E
2021E
Strategic Investments
Profit Drivers
Utilities
2024E
2021E
Transformation Candidates
High Voltage
& Projects
Value Burners
2024E
Cash Conversion Ratio (%)
033
@2021 Nexans CMD presentation
INTRODUCTION
WHY CHANGE?
MANAGEMENT FOCUS
AMPLIFY &
ACCELERATE
OUR GROWTH
IN VALUE ON
ELECTRIFICATION
SEGMENTS
Pursue our
transformation
programs on
ALL SEGMENTS
02
03
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
TRANSFORM OUR
OPERATIONAL MODEL
Pay our performance Debt
Business Unit Portfolio Management 1.0
Business Unit Portfolio Management 2.0
Cost reduction & efficiency initiatives
SHIFT
2018
Amplify & accelerate
our growth in value on
ELECTRIFICATION
SEGMENTS
2019
2020
2021
2022
MANAGEMENT FOCUS
AMPLIFY VALUE
GROWTH
01
2023
2024
TRANSFORM OUR POSITIONING
Change playing field to grow value
M&A - Divestments
SHIFT PRIME
SCALE VALUE UP
as an electrification
pure player
Innovation & Ecosystemic Partnerships
034
@2021 Nexans CMD presentation
01
02
INTRODUCTION
WHY CHANGE?
03
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
FOCUSING ON
CUSTOMERS & INNOVATION
UP TO 200BPS
Gross Margin
observed on average
after 12 months
INITIAL
PERFORMANCE
SUPERIOR
SERVICE VENDOR
Ensure higher availability,
reduce lead-times &
digital supply chain
035
BRAND PRIME
SALES AMPLIFIERS
MIX OPTIMIZATION
SMART INNOVATION
Develop Brand intimacy
through marketing
Enrich offers with
accessories or services
Add incremental
features to products to
improve value
Replace generic offers by
smarter ones
PRIME
PERFORMANCE
@2021 Nexans CMD presentation
01
02
INTRODUCTION
WHY CHANGE?
03
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
M&A AMPLIFY OUR ELECTRIFICATION SCOPE & OFFER
Nexans articulates its M&A strategy alongside two complementary axis:
BOLT-ON INNOVATION ACQUISITIONS
– Consolidation deals in the field of electrification
– Bolt-On deals enabling to enrich our value offer in the
field of electrification
TRANSFORMATIVE CONSOLIDATION ACQUISITIONS
8
GENERATION
14
NORTH
AMERICA
32
37
130
036
DISTRIBUTION
USAGES
Nexans is currently screening bolt on acquisition opportunities to enhance
its offer alongside the electrification value chain alongside 3 axes:
EUROPE
39
SOUTH
AMERICA
TRANSMISSION
AFRICA &
MIDDLE EAST
OPPORTUNITIES HAVE
BEEN ALREADY IDENTIFIED
& 20 SHORTLISTED
ASIA
#01
DESIGN & ENGINEERING
SERVICES
#02
DATA COLLECTION,
MANAGEMENT &
EXPLOITATION
#03
SMART
PRODUCTS
Amplify the impact of SHIFT PRIME and Nexans
innovation program through our bolt on
acquisition portfolio
@2021 Nexans CMD presentation
01
02
INTRODUCTION
WHY CHANGE?
INNOVATE
TO ELECTRIFY
100% DEDICATED
TO ELECTRIFICATION
+800
Technical Experts
Patents
>50
Innovation per year
037
NEW FINANCIAL TRAJECTORY
DISTRIBUTION
USAGES
– Artificial intelligence
– Digital twin
Increase grid resilience to
blackout risk through asset live
monitoring & management
SUSTAINABILITY
– Recycling
– Carbon neutrality
HOW TO CHANGE?
– Services
– Risk management
DIGITALISATION
– Industry 4.0
– Connected products
(IoT)
TRANSMISSION
05
Increase green generation
reliability, monitoring
interconnections & OWF
connection to the shore
CUSTOMER EXPERIENCE
– Supply chain
– Smart products
WHAT TO CHANGE?
04
MANAGING
RISKS
ANSWERING
CUSTOMER NEEDS
+€100m +1800
R&D Expenses
GENERATION
03
– Circular economy
Increase building safety
trough live monitoring of the
electrical system
@2021 Nexans CMD presentation
01
02
INTRODUCTION
WHY CHANGE?
03
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
SUPERCONDUCTING SYSTEMS - A BREAKTHROUGH FOR RELIABLE AND RESILIENT URBAN GRIDS
TRANSMISSION
GENERATION
DISTRIBUTION
USAGES
NEXANS
SFCL
CROSS-BORDER
INTERCONNECTION
GRID
AUTOMATION
SMART SWITCH &
DISTRIBUTION AUTOMATION
038
SUPERCONDUCTIVE
HV LINK
@2021 Nexans CMD presentation
01
02
INTRODUCTION
WHY CHANGE?
03
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
SUPERCONDUCTING SYSTEMS - A BREAKTHROUGH FOR RELIABLE AND RESILIENT URBAN GRIDS
TRANSMISSION
GENERATION
DISTRIBUTION
USAGES
SUPERCONDUCTIVE
HV LINK
1-3 GW
at the heart of the town
90%
less civil work
ZERO
thermal and
electromagnetic
signature
039
SUPERCONDUCTIVE
HV LINK
@2021 Nexans CMD presentation
01
02
INTRODUCTION
WHY CHANGE?
03
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
SUPERCONDUCTING SYSTEMS - A BREAKTHROUGH FOR RELIABLE AND RESILIENT URBAN GRIDS
GENERATION
TRANSMISSION
DISTRIBUTION
USAGES
NEXANS
SUPERCONDUCTIVE FAULT CURRENT LIMITERS (SFCL)
- Divide fault probability by a factor 4
- Allow distributed generation integration
- Keep existing Network
NEXANS
SFCL
040
@2021 Nexans CMD presentation
01
02
03
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
A DIGITAL TWIN IS A UNIQUE VIRTUAL MODEL OF A REAL GRID
DISTRIBUTION
TRANSMISSION
GENERATION
USAGES
ASSET ELECTRICAL
SOFTWARE SOLUTION
- Provides visualization, analysis, prediction and optimization
- >20% efficiency in operation & optimized investments
- Targeted maintenance
REAL
WORLD
041
– Data source: Roland Berger
DIGITAL TWIN:
REAL TIME REPLICA
- Reduced energy loss
50%
58%
53%
+45 YEARS
value of lines (cables, support,
connectors) in grid assets
network faults due to
lines/cable network
of the surface burned in
California was due to fires of
electrical power origin in 2017
is the average grid age in EU
@2021 Nexans CMD presentation
01
02
INTRODUCTION
WHY CHANGE?
03
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
NEXANS STRATEGY FOR IoT DEVELOPMENT
ENABLING AN HOLISTIC APPROACH OF THE GRID RISKS & CHALLENGES
#01
TRACKING
ASSETS
Track location, characteristics and status of
valuable grid components.
–
–
–
–
Shorten operations time
Stock management
Anti Theft
Cost avoidance
Covered Assets:
– Cable drums
– Accessories
#02
MONITORING
ASSETS
#03
MANAGE
ASSETS
Monitor the electrical assets during their lifetime
to predict failures, ease maintenance increasing
safety & reliability.
Optimize the use of grid functioning, from
generation to usage. Make live decisions on
energy routing.
–
–
–
–
–
– Increases grid resilience
– Maximize use of generated electricity
– Balance energy offer & demand
Reduce risks of grid failure
Prevent fire risk in buildings
Maintenance costs control
Electrical loss reductions
CAPEX avoidance
Covered Assets:
– Cables
– Network components
Covered assets:
– Grid sensing Smart grids
– HV & MV infrastructures
25% NEXANS CONNECTED PRODUCTS BY 2024 (IoT)
042
@2021 Nexans CMD presentation
01
02
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
S
IN
W
T
NA
DI
GI
TA
RECY
CLIN
G
AI
I TA
NEW FINANCIAL TRAJECTORY
IT Y
EM
EN
T
D/A.I.
U
O
CL
CIRCULAR ECO
N
O
MY
IoT CONN
ECTI
VIT
Y
BIL
AL
UTR
NE
DIG
HOW TO CHANGE?
ST
L
05
U
L
Y 4.0
R
T
S
U
IND
04
ON
RB
CA
INNOVATE TO ELECTRIFY
AMPLIFY – OUR IMPACT
THANKS TO OUR PARTNERS
03
D
ES
IG
N
M
K
RIS
CU
043
G
A
AN
SUPPLY
STO
MER EX
C
N
E
I
PER
E
@2021 Nexans CMD presentation
01
02
03
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
NEXANS INNOVATION PIPELINE
FULLY DEDICATED TO AMPLIFY THE ELECTRIFICATION
RESIDENT ENGINEER
VIRTUAL TRAINING
SERVICES
RISK MANAGEMENT
BUSINESS CONTINUITY MANAGEMENT
EV CHARGING SOLUTIONS
INFRABIRD
DIGITAL SUPPLY CHAIN
IoT
HEDGING
TRANSMISSION
SMART INVENTORY MANAGEMENT
GRID MONITORING
INSTALLATION
GENERATION
TECHNOLOGIES
ELECTRICAL ASSET MANAGEMENT
DISTRIBUTION
CABLE
RECYCLING
USAGES
INFIT ®
POWERBOOST ®
KELIOS HARNESS
HVAC
FLEXIBLE CABLES
HVDC 525KV
SUPERCONDUCTIVITY
SMART ACCESSORIES
ALSECURE ®
CONNECTED EV CHARGING SYSTEM
MARKING TECHNOLOGIES
(DISTING, LIFMARK, METRIUM)
044
@2021 Nexans CMD presentation
01
02
03
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
04
HOW TO CHANGE?
05
NEW FINANCIAL TRAJECTORY
HOW TO
CHANGE?
TRANSFORM
AND INNOVATE
045
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
01
02
03
046
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
GENERATION
& TRANSMISSION
DISTRIBUTION
USAGES
@2021 Nexans CMD presentation
01
02
03
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
WHAT IS
GENERATION
AND TRANSMISSION?
Distributed generation
(Utility scale)
04
HOW TO CHANGE?
05
NEW FINANCIAL TRAJECTORY
Distributed generation
(Private)
Offshore wind
Residential
Onshore wind
Datacentres
Solar
Infrastructures
Hydro
Industrial
Centralised
generation
Nuclear
Transmission
subsea and land
Distribution
Commercial
Mobility
Fossil
GENERATION AND TRANSMISSION
047
Usages
DISTRIBUTION
USAGES
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
OFFSHORE WIND FARMS ENABLE THE GREEN TRANSITION
2.5X CABLE MARKET GROWTH NEXT DECADE
CABLE MARKET FORECAST
€8bn*
CAGR
+11.5%
€3bn*
2019
OFFSHORE
WIND FARMS
CENTRALISED
GENERATION
MAIN DRIVERS
COMPETITIVE COST
OF ENERGY VS OTHER
RENEWABLE SOURCES
PEOPLE
ACCEPTANCE
€250-400m
+200GW
of cable value per GW installed
to be installed by 2030
2030e
*per year
VALUE CHAIN OF OFFSHORE WIND FARM
ESSENTIAL COMPONENT
EXPORT CABLE
LAND SECTION
OFFSHORE PLATFORM
Cables are becoming more powerful,
dynamic and covering longer distances
83%
of the cost of Offshore Wind Farm
construction claims are cables generated
048
– Data source: Roland Berger
SUBSTATION
INTER-ARRAY CABLE
(33 OR 66 kV)
HIGH VOLTAGE
GRID
EXPORT CABLE SUBSEA SECTION
(3220 kV HVAC OR HVDC)
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
05
NEW FINANCIAL TRAJECTORY
BUILDING THE ENERGY HIGHWAY
BRINGING ENERGY FROM THE GENERATION AREA TO THE CONSUMPTION AREA
TRANSMISSION
MAIN DRIVERS
INCREASING SHARE
OF RENEWABLES BUT
GEOGRAPHICAL MISMATCH
MASSIVE INVESTMENTS
IN NEW CABLE LINKS TO
SECURE ELECTRICITY SUPPLY
INTERCONNECTIONS
TRANSMISSION
MORE POWER,
LONGER DISTANCES,
GREATER DEPTHS
+72.000 km
>€25bn
>60+
High voltage power
cables to be installed
between 2020 - 2030
to be invested in cable links in the
US over the 2021–2030 period.
Nexans estimate of HVDC Land
cable to renew US grid by 2030
large projects in
EU and APAC
VALUE CHAIN OF SUBSEA INTERCONNECTION
CABLE MARKET FORECAST
€5bn
CAGR
+14.3%
HIGH VOLTAGE
GRID
€1bn
2019
049
– Data source: Roland Berger
2030e
SUBSTATION
SUBSTATION
HIGH VOLTAGE
GRID
INTERCONNECTOR
@2021 Nexans CMD presentation
01
02
03
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
04
HOW TO CHANGE?
05
NEW FINANCIAL TRAJECTORY
NEXANS HAS INVESTED > €500m IN THE ENERGY TRANSITION
AT A TARGETED IRR > 20%
PHASE 1
€360M
R&D
PHASE 2
2021-2024
€200M
050
*Front-End Engineering and Design
NEXANS AURORA
STATE-OF-THE ART CABLE
LAYING VESSEL
CHARLESTON PLANT
THE 1ST SUBSEA HV MANUFACTURING
FACILITY IN THE US
2018-2021
FEED*
ENGINEERING
MANUFACTURING
INSTALLATION
AFTER MARKET
UPGRADE CHARLESTON FACILITY
TO INCREASE SUBSEA & LAND
HVDC MANUFACTURING CAPACITY
EXPANSION OF THE HALDEN PLANT
ADDING 2 NEW LINES FOR HVDC
CABLE MANUFACTURING
For Offshore Wind Farm and Land
HVDC US corridors
F or Offshore Wind Farms
and Interconnections
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
FOCUS OUR RESOURCES IN THE BEST PORTFOLIO
MODELIZE TO PRICE RISK AT ITS FAIR VALUE
#01
–
–
–
#02
PROJECT RISK
Technology risk
Statistics of past projects
Terms & conditions
–
–
Vessels & Installation tools
Cable manufacturing plants
SHIFT Project modeling enables us to go one step
further in asset modeling and risk management.
Target risk/return
area
BACKLOG OUTSIDE TARGETED
RISK/RETURN AREA
RETURN
Non attractive
risk/return area
BACKLOG WITH TARGETED
RISK/RETURN AREA
RISK
051
Nexans has reshuffled the backlog, lowering risk
while yielding capacity and improving returns.
NEXANS BACKLOG PROFILE (ILLUSTRATION)
#03
TENDER
SELECTIVITY
ASSETS YIELD
2018
2019
2020
2021
2022
2023
2024
@2021 Nexans CMD presentation
01
02
03
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
BUILDING RELIABLE GREEN ENERGY GENERATION & TRANSMISSION
COMBINING ANALYTICS WITH A SOUND RISK MANAGEMENT TRACK RECORD
Nexans end-to-end approach of risk management for Subsea
and Land EPCI projects combine robust processes, advanced
modelization tools and an historic database for the best results.
DESIGN AND ENGINEERING
83%
of claims linked to
cables from 2012–2017
for Offshore Wind
Farm projects
052
– Data source: Roland Berger
MANUFACTURING
INSTALLATION
A PARTNERSHIP TO BRING PROJECT & RISK
MANAGEMENT A STEP FURTHER
Certifies the Nexans way of managing EPCI projects & risks
Develops new standards for the OWF and Interconnection industry
Reduces risk profile of such projects
Reduces Nexans time to market
@2021 Nexans CMD presentation
01
02
03
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
04
HOW TO CHANGE?
05
NEW FINANCIAL TRAJECTORY
MANAGE CRITICAL GENERATION & TRANSMISSION ASSETS
SECURE ENERGY SUPPLY
€9.3bn
1 YEAR
Expected cost of 2020-2030 interconnection
cable outage, which is 2x to 5x more than
during the previous decade
Worst case repair duration due to
complex engineering asset availability,
legal processes and expert availabilities
NEXANS BUSINESS CONTINUITY SOLUTIONS
Electricity transfer
downtime reduced by
Reduce downtime losses
70%
with a Nexans
Service subscription
SURVEILLANCE
053
ASSET MANAGEMENT
ANTICIPATION
EMERGENCY REPAIR
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
05
NEW FINANCIAL TRAJECTORY
PUSHING TECHNICAL FRONTIERS
BROADENING THE SCOPE OF POSSIBILITIES FOR OUR CLIENTS
2020
2024
CUTTING EDGE TECHNOLOGY
AMPLIFY TECHNOLOGY LEADERSHIP
HVDC Extruded:
525kV Subsea and Land cable system
Long Distances:
World’s longest HVDC interconnector 525 kV – 623 km
OFFSHORE
WIND FARMS
Deep Water Applications:
• Increase voltage levels beyond 525kV for our subsea and
land cables systems
• Deep water applications down to 3,000m
• Advanced cable systems for floating Offshore Wind Farms
• World’s deepest 420 kV XLPE cable – 550 m water depth
• Nexans’ deepest HVDC interconnector installed at 1,500 m water depth
• Hybrid cable at 2,300m
• Next generation cable installation and protection
• Amplify technological leadership through HVDC
Powerboost™, Nexans proprietary solution for thermoplastics
Dynamic Applications:
Dynamic HV cables to world’s first floating offshore wind farm
INTERCONNECTORS
054
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
01
02
03
055
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
GENERATION
& TRANSMISSION
DISTRIBUTION
USAGES
@2021 Nexans CMD presentation
01
02
03
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
WHAT IS
DISTRIBUTION?
Distributed generation
(Utility scale)
04
HOW TO CHANGE?
05
NEW FINANCIAL TRAJECTORY
Distributed generation
(Private)
Offshore wind
Residential
Onshore wind
Datacentres
Solar
Infrastructures
Hydro
Industrial
Centralised
generation
Nuclear
Transmission
subsea and land
Distribution
Commercial
Mobility
Fossil
GENERATION AND TRANSMISSION
056
Usages
DISTRIBUTION
USAGES
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
A GROWING ENERGY DEMAND
BUT THROUGH AN AGEING GRID ASSET
GROWTH DRIVERS
INVESTMENT
+1.8 BILLION
+17%
inhabitants to have access
to electricity by 2030
CABLE MARKET FORECAST
€62bn
35-40
Average cable life time 30 years
25-30
25-30
AFRICA
20-25
MIDDLE EAST
CHINA
15-20
SOUTH-EAST
ASIA
20-25
LATIN AMERICA
NORTH AMERICA
EUROPE
25-30
– Data source: Roland Berger
to be invested from 2020 to 2030
for electrification, renewables
& network replacement
BUT THE WORLD IS FACING AN AGEING ELECTRICAL GRID ASSETS...
Estimates of average grid age per region and expected lifetime in years
45-50
DISTRIBUTION & UTILITY
SCALE DISTRIBUTED
GENERATION
057
€4.4tn
renewable electricity
capacity by 2030
REST OF APAC
DISTRIBUTION
additional electrical energy
to be produced in 2030
compared to 2019
X2.6
CAGR
+4.2%
€40bn
2019
2030e
@2021 Nexans CMD presentation
01
02
03
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
STRENGTHEN THE DISTRIBUTION NETWORK
SECURE GRID SOLUTIONS TO FACE THE GROWTH AND REPLACEMENT
TM
SE
AS
FROM:
TO:
Turnkey Superconductors solutions
80
ENGINEERS 100%
DEDICATED TO
SUPPORT THESE
SOLUTIONS
058
Smart cables
& accessories
NS
IO
UT
OL
TS
EN
EM
AG
AN
MS
TE
YS
TS
AR
SM
CABLES
CABLES &
ACCESSORIES
N
IG
ES
ED
UR
CT
ITE
CH
AR
SOLUTIONS OFFER
N
TIO
LA
AL
ST
IN
PRODUCT OFFERING
Asset Management,
and preventive
maintenance for
the aging grid with
Turnkey solutions to connect utility scale renewable farms
Turnkey solutions for electrification - NEOGRID®
@2021 Nexans CMD presentation
TURNKEY SOLUTIONS
TO CONNECT UTILITY SCALE
RENEWABLE FARMS
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
IMPROVE TOTAL COST OF OWNERSHIP TROUGH GRID ENGINEERING
Nexans brings end-to-end solutions to connect utility scale renewable farms connection to the grid.
We combine a unique architecture design know how with, installation, civil work, cables, active & passive accessories.
AN END-TO-END SOLUTION
ARCHITECTURE DESIGN
CABLES
ACCESSORIES
INSTALLATION
ARCHITECTURE DESIGN: A UNIQUE KNOW HOW TO OPTIMIZE THE COLLECTOR DESIGN
STOCKYARD HILL WIND FARM
CABLE SIZING
149 turbines, 540MWp, 1350GWh, Australia
-7%
CAPEX
059
-9.1%
20 years TCO vs.
Standard Blueprint
–
–
–
–
LAY-OUT OPTIMIZATION
ARCHITECTURE
Reduce losses to optimize power output
Reduce total CAPEX
Support arbitration on the OPEX vs. CAPEX balance
Reduce risk of electrical failure trough more resilient designs
@2021 Nexans CMD presentation
NEOGRID®
TURNKEY SOLUTIONS
FOR ELECTRIFICATION
01
02
03
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
Nexans NEOGRID® offer is dedicated to emerging area searching solutions
to electrify safely, rapidly and at the best cost a specific region
NEOGRID® TURNKEY SOLUTION
ARCHITECTURE
DESIGN
FINANCING
CABLES
ACCESSORIES
INSTALLATION
A FOCUS ON HARDWARE SOLUTION:
ACTIVE & PASSIVE COMPONENTS
PIONEER PROJECT
ELECTRIFICATION PROJECT IN IVORY COAST, FULL TURNKEY
€10m 51
Project
060
villages
to electrify
35
Polls Transformers
Substation
Cables -EDR Max –
low civil work
Connections
& protections
completed
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
01
02
03
061
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
GENERATION
& TRANSMISSION
DISTRIBUTION
USAGES
@2021 Nexans CMD presentation
01
02
03
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
WHAT IS
USAGES?
Distributed generation
(Utility scale)
04
HOW TO CHANGE?
05
NEW FINANCIAL TRAJECTORY
Distributed generation
(Private)
Offshore wind
Residential
Onshore wind
Datacentres
Solar
Infrastructures
Hydro
Industrial
Centralised
generation
Nuclear
Transmission
subsea and land
Distribution
Commercial
Mobility
Fossil
GENERATION AND TRANSMISSION
062
Usages
DISTRIBUTION
USAGES
@2021 Nexans CMD presentation
01
02
03
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
BUILDING CABLE MARKET
BRING SAFE ELECTRICAL POWER AT THE HEART OF OUR LIFE PLACES
>30 MILLION
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
CABLE MARKET FORECAST
€81bn
43
of EVCS will be installed by between
2019 and 2030 (residential, commercial
and workplace) in Europe
04
megacities in 2030
- Urbanization
CAGR
+3.8%
€55bn
Predicted Sales
2019
+6 GWP
USAGES
BUILDINGS,
INFRASTRUCTURES,
MOBILITY, DATACENTERS
MAIN
DRIVERS
of BIPV capacity to be
installed between 2018 and
2022 worldwide
BUILDING
RETROFIT
063
– Data source: Roland Berger
+1.8 BILLION
2030e
ELECTRICAL SAFETY
inhabitants to have access
to electricity by 2030
NEW REGULATIONS AND
OPTIMIZATION (BIM)
1 FIRE EVERY
UP
TO
80%
2 MINUTES
caused by an electrical
origin in the EU
of fire outbreaks due
to counterfeit cables
in emerging countries
@2021 Nexans CMD presentation
01
02
03
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
04
HOW TO CHANGE?
05
NEW FINANCIAL TRAJECTORY
BUSINESS UNIT PORTFOLIO MANAGEMENT 2.0
SCALE UP SUCCESSFUL UNITS DNA SEQUENCE
BUSINESS UNIT 1
BUILDING BUSINESS UNITS PORTFOLIO
Strategic Investments
Profit Drivers
Innovation Drivers
BU2
BU1
BU3
BU4
BU6
EBITDA %
BU7
BU10
BU12
Value Burners
~50%
SALES
EBITDA
ROCE
BUSINESS UNIT 2
BU13
BU14
BU16
~16%
BU8
Transformation Candidates
BU17
€70m
BU5
BU9
BU11
SHIFT PERFORMANCE & SHIFT PRIME DEPLOYED:
Branded product innovation program focused on
ease to use & packaging
SHIFT PERFORMANCE & SHIFT PRIME DEPLOYED:
Branded differentiation based on product safety
and full electrification kit delivery
BU15
>€50m
~21%
~35%
SALES
EBITDA
ROCE
Cash Conversion Ratio (%)
064
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
STRENGTHEN THE DISTRIBUTION NETWORK
RESILIENCE AND EFFICIENCY TROUGH SMART SOLUTIONS
TO:
ONE UNIQUE
PLATFORM
065
DEDICATED
PEOPLE
6
REGIONAL
DESIGN LABS
3
Fire Resistant
SPECIALTY
DESIGN LABS
HFFR
– IoT/Connected products
– End-to-end Supply Chain
– Digital Customer Apps, Web
Product Innovations to ease installation &
transport, enhance safety and increase
installer productivity
MOBIWAY®
50% of interviewed client
would be ready to change
distribution branch to have it
Y
OR
CT
FA
NEXANS
CONNECTED
PRODUCTS BY
2024
80
LE
ND
HA
25%
FIRE SAFETY
CABLES
NS
IO
AT
ER
OP
TO
SY
EA
PVC
CABLES
L
TA
GI
DI
SOLUTIONS OFFER
LS
OO
/T
IES
OR
SS
CE
AC
PRODUCT OFFERING
D
-EN
TO
DEN
FROM:
End-to-end
supply chain
EASYCALC
Cable
Dimensioning
App
AGICITY®
@2021 Nexans CMD presentation
AGICITY®
ELECTRIC VEHICLES CHARGING
STATIONS SOLUTIONS
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
05
NEW FINANCIAL TRAJECTORY
From power distribution to asset management, Nexans offers a complete solution
for AC and DC Electrical Vehicles Charging Stations (EVCS)
AN END-TO-END SOLUTION
POWER CONNECTION
EVCS
INSTALLATION
ASSET MANAGEMENT
EVCS: ELECTRICAL VEHICLE CHARGING STATION
SERVICES BY AGICITY
A hotline, a real-time supervision software, experts, to
guarantee faultless operation of the installations.
Nexans offers preventative and on-going maintenance
services based on real-time supervision tools (SIGP).
066
AGICITY AP
7 TO 22KVA-AC
AGICITY FAST
24 KVA DC
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
NEXANS UNIQUE VALUE PROPOSITION END-TO-END SUPPLY CHAIN
FROM...
...TO
MAKE TO ORDER
MAKE TO AVAILABILITY
STATIC INVENTORY
SUPPLY CHAIN DISRUPTION
DIGITAL END-TO-END MONITORING (IoT)
ROCE
COST FOCUS ONLY
2
VERTICAL INTEGRATION: COPPER/ALU/RECYCLING
ROCE2 : RETURN ON CAPITAL EMPLOYED
VS RETURN ON CARBON EMPLOYED
NEXANS SUPPLY CHAIN 4.0: AMPLIFY OUR IMPACT
SECURE COPPER
SCARCITY
CABLES
PRODUCTION
CABLES
INVENTORY
DISTRIBUTORS
WAREHOUSES
DISTRIBUTORS
AGENCIES
END USERS
RECYCLING
END-TO-END SUPPLY CHAIN TO OPTIMIZE ROCE2
067
@2021 Nexans CMD presentation
01
02
03
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
CABLE FIRE
TECHNOLOGIES
FOR A SAFER
ELECTRIFICATION
1 FIRE EVERY
2 MINUTES
25% TO 30%
caused by an electrical
origin in the EU
of domestic fires caused by
an electrical origin in the EU
FIRE RESISTANT & RETARDANT CABLES
FIRE IGNITION
Catch fire easily in case of short circuit
Heat but does not burn
FIRE PROPAGATION
Transmit fire between rooms across cable pipes
HFFR Does not transmit fire
TOXIC FUMES
Fire smoke opacity blocks visibility at 5m
50m visibility through HFFR cables smoke
SAFETY SYSTEMS
RELIABILITY
Melt and stop powering safety systems such as
lighting or ventilation
HFFR withstand 1000 °C more than 2 hours
still transmitting electric current
– Data source: Roland Berger
HOW TO CHANGE?
05
NEW FINANCIAL TRAJECTORY
NEXANS OWNS
+150 PATENTS THAT
ARE FIRE SAFETY
RELATED
PVC / PE STANDARD CABLES
068
04
1,000
FATALITIES
GROWING POWER IN
RESIDENTIAL BUILDING
in the EU each year
24M EVCS to be installed in
residential building by 2030
The Construction Products
Regulation (CPR) in Europe,
is setting fire requirements
for cables which can prevent
or accelerate fire depending
on the chosen technology
@2021 Nexans CMD presentation
01
02
03
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
04
05
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
INDUSTRY 4.0
MANUFACTURING COMPETITIVENESS
PERFORMANCE MONITORING
PREDICTIVE MAINTENANCE
Process Efficiency & Data Visibility
Analytics to increase Overall Equipment
Effectiveness (OEE)
ENERGY MONITORING
CONTROL TOWER
Carbone Emission Reduction
Quality Reliability and Stability
AUGMENTED OPERATOR
LEAN DIGITALISATION SYSTEM
In Hands Information (Real Time Data and Analytics
Model Combination)
Kanban, Work Instructions, Work Orders
On-line Training Support
069
INTEGRATION OF DIGITAL SOLUTION IN INDUSTRIAL
PROCESS AND DATA DRIVEN FACTORY
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
05
NEW FINANCIAL TRAJECTORY
SCALE-UP
TO STEP-UP
PERFORMANCE
NEW
FINANCIAL
TRAJECTORY
2021–2024
070
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
01
03
071
INTRODUCTION
STEP-UP
ELECTRIFICATION
M&A
02
04
05
NEW FINANCIAL TRAJECTORY
AMPLIFY
ELECTRIFICATION
Organic Growth
SCALE-UP TO STEP-UP
PERFORMANCE
Group Financial Trajectory
2021 - 2024
@2021 Nexans CMD presentation
WHERE DO WE
COME FROM?
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
EBITDA (€m)
% sales at standard metal prices
5.3%
6.4%
6.1%
STEERED FOR GROWTH
Since 2019 Nexans has restored its profitability,
reinforced its balance sheet and shifted the
financial mindset to cash generation
ROCE (%)
05
NEW FINANCIAL TRAJECTORY
FREE CASH FLOW (€m)
6.5-8%
410-450
12.5%-14.5%
157
413
11.1%
347
325
100-150
10.2%
The company has delivered:
9.0%
#01
#02
#03
Cost
reductions
covering
fixed costs
and industrial
performance
SHIFT
program
Portfolio
management
& selective
growth
54
25
2018
2019
2020
2021
2018
2019
2020
2021
2018
2019
2020
2021
Notes:
– 2018 pre IFRS16 implementation
– Starting January 1st 2020, change in copper standard price from 1,500 €/ton to 5,000€/ton. 2018 and 2019 EBITDA% calculated based on restated sales at standard metal price
– ROCE calculated as 12 months Operating Margin on end of period / Closing Capital Employed, excluding antitrust provision
072
– FCF before M&A and equity flows
– 2021 as per current perimeter, i.e excluding M&A and/or divestments
– Scenarios considered in the current CMD presentation will be further analyzed prior to deciding their implementation and projects resulting from those
studies will be submitted to relevant legal bodies including to employee representatives bodies if applicable and when needed.
@2021 Nexans CMD presentation
01
02
03
04
05
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
OUR COMMITMENTS
AMPLIFY AND SCALE-UP WITH DISCIPLINE
ROTATE TO ELECTRIFICATION
SCALE-UP IN VALUE
SALES AT STANDARD METAL PRICES:
EXISTING ELECTRIFICATION
(Organic, including
strategic CAPEX)
€6 - 7bn
€0.5bn
2021
€6bn
Metallurgy
REVENUES
Sales standard
metal price
€1bn
Telecom
INORGANIC
(M&A)
Industry
& solutions
EBITDA
% Sales
(including
strategic CAPEX)
Electrification
073
8 -10%
€3.5 - 3.7bn
11 -13%
2021
~€6bn
6.5 - 8%
2024
€6 - 7bn
10 -12%
≥ 30%
≥ 40%
≥ 20%
≥ 40%
ROCE
≥ 15%
≥ 20%
12.5 -14.5%
N/A
OWC %
(3)
CAPEX %
(4)
Leverage
Ratio
(5)
≤ 6%
≤ 2.5%
≤ 2.5x
€3.5 - 3.7bn
ORGANIC
2021
€3 - 3.2bn
2024
OVERALL GROUP
(Including M&A, Divestments)
NCCR
(1)
€3 - 3.2bn
SUSTAINABLE & SOUND
BALANCE SHEET
2024
(2)
– Notes:
– (3) OWC% as Closing / (Previous Quarter Actual Sales x 4)
– (1) NCCR (Normalized Cash Conversion Ratio) defined as Normalized Free Cash Flow / EBITDA – NFCF excludes strategic capex, PP&E divestment,
one off-change in working capital and material restructuring plans cash out. Segment NCCR computed after allocation of Group mutualized costs
– (4) CAPEX% as Recurring CAPEX / 12 months Standard Sales
– (2) Excluding potential goodwill and PPA assets arising from M&A / Assuming Nexans cumulated depreciation ratios for acquired fixed assets
– Scenarios considered in the current CMD presentation will be further analyzed prior to deciding their implementation and projects resulting from those
studies will be submitted to relevant legal bodies including to employee representatives bodies if applicable and when needed.
– (5) Leverage Ratio: Average of last two published net debt on
Last Twelve Months EBITDA
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
01
03
074
INTRODUCTION
STEP-UP
ELECTRIFICATION
M&A
02
04
05
NEW FINANCIAL TRAJECTORY
AMPLIFY
ELECTRIFICATION
Organic Growth
SCALE-UP TO STEP-UP
PERFORMANCE
Group Financial Trajectory
2021 - 2024
@2021 Nexans CMD presentation
01
02
03
04
05
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
ELECTRIFICATION DRIVING NEXANS PROFITABILITY IN 2020
A HIGHLY ACCRETIVE SEGMENT...
2%
Metallurgy
3%
18%
21%
32%
Other Cable
Segments
55%
ROCE
≥200 BPS
OWC %
≤500 BPS
NCCR %
(2)
≥500 BPS
55%
27%
Electrification
(HV + B&T)
...DISPLAYING IN SUPERIOR RATIOS
VS. OTHER CABLES SEGMENTS
EBITDA %
≥50 BPS
77%
66%
In light of the 2020 financial performance, Electrification displays
the most appealing metrics.
45%
Nexans has been paving the way for Electrification over the past
3 years with most of CAPEX allocated to this Segment.
As of 2020 financial data
075
SALES (1)
EBITDA
OWC
CAPEX
(last 3 years)
– (1) At standard metal prices
– (2) NCCR (Normalized Cash Conversion Ratio) defined as Normalized Free Cash Flow / EBITDA – NFCF excludes strategic CAPEX, PP&E divestment,
one-off change in working capital and material restructuring plans cash out. Segment NCCR computed after allocation of Group mutualized costs
– Scenarios considered in the current CMD presentation will be further analyzed prior to deciding their
implementation and projects resulting from those studies will be submitted to relevant legal bodies including to
employee representatives bodies if applicable and when needed.
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
AMPLIFY
ELECTRIFICATION
ACTIVITIES 2021-2024
A €150m
EBITDA STEP-UP
EXISTING ELECTRIFICATION
EBITDA (€m) EXCLUDING M&A
05
NEW FINANCIAL TRAJECTORY
11-13%
EBITDA%
+€150m EBITDA
45
40
430 - 470
50
8-10%
EBITDA%
15
280 - 320
2021 E
076
Net Cost
Improvement from
Fixed Costs and
Industrial Performance
AMPLIFY
SHIFT
Strategic
CAPEX
– Scenarios considered in the current CMD presentation will be further analyzed prior to deciding their implementation and projects resulting from those studies will be submitted to relevant legal bodies including to employee representatives bodies if applicable and when needed.
2024 E
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
PHASING
2022
2023
2024
30 - 40%
60 - 70%
100%
30 - 40%
60 - 70%
100%
20 - 30%
50 - 60%
100%
0%
0%
100%
AMPLIFY
ELECTRIFICATION
2021-2024
ROADMAP
INDUSTRIAL
PERFORMANCE,
PURCHASING
AND COST
EFFECTIVENESS
Actions on industrial performance, purchasing and cost
competitiveness will balance the effect of inflation over
time from year one.
SHIFT performance, SHIFT prime, SHIFT Subsea
modelling and Power-Up innovation program will
contribute to EBITDA expansion alongside two axis:
– Selective growth, leveraging the strong organic
dynamic of the electrification segment and portfolio
management methods
NEW FINANCIAL TRAJECTORY
AMPLIFY
SHIFT, AMPLIFY
AND MARKET
GROWTH
SHIFT
– Sharing additional value created from the programs
with our clients
STATEGIC CAPEX
077
05
– Scenarios considered in the current CMD presentation will be further analyzed prior to deciding their implementation and projects resulting from those
studies will be submitted to relevant legal bodies including to employee representatives bodies if applicable and when needed.
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
01
03
078
INTRODUCTION
STEP-UP
ELECTRIFICATION
M&A
02
04
05
NEW FINANCIAL TRAJECTORY
AMPLIFY
ELECTRIFICATION
Organic Growth
SCALE-UP TO STEP-UP
PERFORMANCE
Group Financial Trajectory
2021 - 2024
@2021 Nexans CMD presentation
01
02
03
04
05
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
M&A – ROTATE THE CORE TOWARD ELECTRIFICATION SOLUTIONS
LEVERAGE TRANSFORMATION EXPERIENCE TO DRIVE INTEGRATION
SALES AT STANDARD METAL PRICES
€6 - 7bn
€0.5bn
€6bn
Metallurgy
TRANSFORMATIVE
CONSOLIDATION
ELECTRIFICATION
ON M&A
€1bn
Telecom
BOLT-ON
INNOVATION
Industry
& solutions
€3 - 3.2bn
€3.5 - 3.7bn
DIVESTMENTS
INVESTMENT THESIS
KEY DECISION METRICS
– Consolidate to generate scale effect,
increase customer reach and duplicate
our model
– IRR >>WACC
– Synergies from costs, SHIFT programs
and Amplify program deployments
– Multiples within cable industry
usual ranges
– Complete Nexans electrification offer
beyond hardware
– Incremental growth and GM
improvement potential
– Scale up a new value proposition
trough Amplify program
– Multiples can reach ranges higher
than cable industry usual ones
– Divest non core activities
– Multiples within cable industry
usual ranges
– Cash Flow accretive
– Fair sharing of expected synergies
Electrification
2021
079
2024
– Scenarios considered in the current CMD presentation will be further analyzed prior to deciding their implementation and projects resulting from those
studies will be submitted to relevant legal bodies including to employee representatives bodies if applicable and when needed.
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
01
03
080
INTRODUCTION
STEP-UP
ELECTRIFICATION
M&A
02
04
05
NEW FINANCIAL TRAJECTORY
AMPLIFY
ELECTRIFICATION
Organic Growth
SCALE-UP TO STEP-UP
PERFORMANCE
Group Financial Trajectory
2021 - 2024
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
OVERALL NEXANS GROUP
EBITDA BRIDGE
NEXANS GROUP EBITDA (€m) INCLUDING STRATEGIC CAPEX,
M&A AND DIVESTMENTS
ORGANIC
+200BPS
INORGANIC
+50BPS
+50 - 150BPS
05
NEW FINANCIAL TRAJECTORY
10 - 12%
EBITDA%
6.5 - 8%
EBITDA%
150
410 - 450
2021 E
081
Existing Electrification
(EBITDA improvement
& strategic CAPEX)
– Scenarios considered in the current CMD presentation will be further analyzed prior to deciding their implementation and projects resulting from those
studies will be submitted to relevant legal bodies including to employee representatives bodies if applicable and when needed.
Mix Evolution
(Reduced
Metallurgy
exposure)
Divestment of
non-Core activities
M&A
2024 E
@2021 Nexans CMD presentation
01
02
03
04
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
05
NEW FINANCIAL TRAJECTORY
2022–2024 CASH ALLOCATION PRE M&A
SOLID CASH GENERATION...
€500 - 600m
...WITH BALANCED ALLOCATION BETWEEN SHAREHOLDER
RETURN AND ACCRETIVE CAPEX INVESTMENT...
€500 - 600m
Strategic Investments (40% - 50%)
Strategic CAPEX enabling growth
in selected segments such as
Offshore Wind farms
€280 - 330m
...WHILE ENABLING SIGNIFICANT FIRE
POWER FOR M&A
Return to shareholders (20% - 30%)
>20% minimum payout ratio on
recurring net income
Up to €2bn
before divestitures at leverage
ratio ≤2.5x
Potential divestitures will free
up more liquidity
De-leveraging
Net Cash position in 2024
2019-2021
2022-2024
FCF GENERATION
082
2022-2024
CASH TO
ALLOCATE
– Scenarios considered in the current CMD presentation will be further analyzed prior to deciding their implementation and projects resulting from those
studies will be submitted to relevant legal bodies including to employee representatives bodies if applicable and when needed.
@2021 Nexans CMD presentation
01
02
03
04
05
INTRODUCTION
WHY CHANGE?
WHAT TO CHANGE?
HOW TO CHANGE?
NEW FINANCIAL TRAJECTORY
NEW FINANCIAL TRAJECTORY 2021-2024
SCALE- UP TO STEP-UP PERFORMANCE
#01
083
ROTATE TO
ELECTRIFICATION
#02
SCALE UP
IN VALUE
#03
ROBUST BALANCE SHEET &
NEW DIVIDEND POLICY
€6-7BN SALES (1)
UP TO +400BPS EBITDA
≤2.5X LEVERAGE (3)
ELECTRIFICATION PURE PLAYER
GROUP PROFITABILITY STEP-UP
DISCIPLINED LEVERAGED
+€150M EBITDA
≥40% NCCR (2)
>20% PAY OUT (4)
ELECTRIFICATION ORGANIC PERFORMANCE
GROUP CASH GENERATION
PROGRESSIVE DIVIDEND
– (1) Sales at standard metal prices and including €0.5m Sales from Metallurgy segment
– (2) NCCR (Normalized Cash Conversion Ratio) defined as Normalized Free Cash Flow / EBITDA – NFCF excludes strategic capex, PP&E divestment,
one off-change in working capital and material restructuring plans cash out. Segment NCCR computed after allocation of Group mutualized costs
– (3) Leverage: Average of last two published net debt on Last Twelve Months EBITDA
– (4) Pay-out ratio: Total Dividend on Recurring Net Income
– Scenarios considered in the current CMD presentation will be further analyzed prior to deciding their
implementation and projects resulting from those studies will be submitted to relevant legal bodies including
to employee representatives bodies if applicable and when needed.
@2021 Nexans CMD presentation