Nexans to become the first electrification pure player

• Electrify the Future - Nexans operational model focused on Electrification value chain from generation of energy to transmission and distribution up to usage of energy
• Simplify to amplify - Nexans will focus on four sectors and scale-up through organic and inorganic amplification
• 200 million euros investment in Subsea high voltage by 2023 - Nexans will invest in Norway and in the USA to address the exponential growth of sustainable electrification
• 2024 financial ambitions outlined - Nexans will rotate portfolio towards pure electrification, scale-up in value to significantly step-up performance and cash flow generation while maintaining a robust balance sheet and committing to a progressive dividend

Paris, February 17, 2021 - Nexans is hosting today at 2:00pm CET it’s Virtual Capital Markets Day. Christopher Guérin, CEO, Jean-Christophe Juillard, CFO, and other members of the Executive Committee will highlight the Group’s industrial ambition, operational roadmap and financial objectives for 2021-2024.

Since 2018, Nexans has undertaken an in-depth transformation, building a leaner, more customer centric and profitable Group. In just two years, the successful deployment of the New Nexans operating model, has enabled the Group to unlock value and set strong financial footing.

Today, Nexans is steered for growth.

Our strategy: from a generalist cable manufacturer to pure electrification player

For the last 120 years, Nexans has played a major role in the world’s electrification. This market represents 65% of the world cable market and is expected to grow by +4.3% per annum over the next 10 years driven by key growth trends: growing energy consumption, demand for sustainable energies, grid modernization and protection. The world is becoming more electric and carbon neutral. Likewise, customer needs are changing from cables to systems and interconnected solutions.

Convinced that remaining a generalist will be more a weakness than a strength, Nexans intends to become a pure electrification player.

Simplify to Amplify. The Group will simplify its business model by moving from 8 macro sectors, representing 34 subsectors, to 4 sectors, representing 12 subsectors. Nexans will become a unique fully integrated player covering the entire electrification value chain: from the very start of production of energy, to transmission and distribution of energy, all the way to usage of energy.

The Group will amplify its impact through two axes:

• Pursue transformation program on all segments through 3 main actions: i) deploy an updated activity portfolio management method, enabling a stronger focus on cash generation; ii) continue the implementation of cost and productivity improvement programs; and iii) implement SHIFT Performance program wherever still needed.
• Amplify and accelerate growth on electrification segments through: i) both on transformative deals and bolt-on acquisitions; ii) SHIFT Prime program focused on customer and innovation, and iii) innovations and partnership programs thanks to its global R&D capabilities, partner ecosystem and digital solutions.

Our purpose: “Electrify the future”

Nexans will position all its operations across the electrification value chain. From Generation and Transmission to Distribution and Usages. The Group will enhance its positioning in the Offshore Windfarms and Interconnection markets notably through additional 200 million euros investments, while maintaining a value proposition based on three pillars: i) Risk & project portfolio management, ii) Asset management, and iii) Cutting-edge technology. In Distribution, Nexans will reinforce its turnkey solutions combining cables and accessories with installation, architecture design, smart systems and asset management. In Usages, the Group will focus its offer on end-user electrical safety, support to client competitiveness through seamless supply chain for easy to handle and install products, and smart products integrated in a digital ecosystem.

Nexans will lead the electrification of the future in a sustainable way. As announced during its Climate Day on September 22, 2020, Nexans will reach carbon neutrality by 2030.

2021-2024 financial targets: accelerate value growth and cash generation

By 2024, Nexans will become a 6 to 7 billion euros standard sales pure Electrification player, with higher profitability - EBITDA expected between 10% to 12% of sales and stronger cash generation between 500 to 600 million euros before M&A and equity operations.

First, on its existing Electrification portfolio, the Group aims to generate standard sales of 3.5 to 3.7 billion euros and an EBITDA margin of 11% to 13% compared to 8% to 10% in 2021. To reach this stage in its development, the Group intends to continue to streamline its cost base and improve industrial performance, build on its smart innovations, ramp-up of its investments in state-of-the-art Aurora vessel and the expansion of its Charleston high-voltage subsea plant in the USA, as well as the additional capacity investments in High-Voltage & Projects business.

Second, the Group will rotate the remaining of its portfolio through divestments while also target transformative deals and bolt-on acquisitions to complete its electrification offer and enable Nexans to scale-up with a new value proposition. The related EBITDA improvement is expected between +50 to +150 bps.

Nexans will also maintain strict financial discipline with a leverage ratio1 of less than 2.5. Over the next three years, the Group's cash generation before M&A is expected between 500 and 600 million euros to finance capex investments, raise shareholder returns to achieve a dividend pay-out ratio above 20% and become debt-free by 2024.

Nexans will hold today at 2:00 p.m. CET a virtual investor and analyst conference.
Live webcast link: https://channel.royalcast.com/landingpage/nexans/20210217_2/
Audio dial-in
• International switchboard: +44 (0) 33 0551 0200
• France: +33 (0) 1 7037 7166
• United Kingdom: +44 (0) 33 0551 0200
• United States: +1 212 999 6659
Confirmation code: nexans cmd
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