(AOF) – Nexans announces the success of a bond issue for a total nominal amount of 350 million euros over a maturity of six years and an annual interest rate of 4.25%. This transaction was favorably received by a diversified base of institutional credit investors, in France and internationally, and was oversubscribed four times. Strong demand enabled Nexans to obtain a low coupon rate compared to market conditions for a maturity of six years.
Nexans took advantage of a favorable and well-oriented market environment to refinance in advance its bond issue of 200 million euros at an interest rate of 2.75%, maturing on April 5, 2024. The remainder of the funds will be allocated to general corporate needs.
The bonds are rated BB+ by Standard & Poor’s and have been admitted to trading on the regulated Euronext market in Paris since their issue.
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Key points
– Group created in 1901 specializing in cables intended for electrification;
– Turnover of €6.1 billion achieved 13% in energy production and transmission, 16% in distribution, 27% in construction, 23% in industry and solutions and 5% in telecoms and data;
– Distribution of sales at 45% in Europe, 31% in the Americas, 14% in Asia Pacific and 8% in the Middle East, Africa and Russia;
– “Electrifying the future” business model centered on the electrification value chain, from energy production to its transmission, distribution and consumption, favoring growth in value and the premiumization of offers and understanding the complexity via the “E3” performance measurement tool (Economy, Environment, Commitment);
– Capital split with 3 strong positions – the Chilean Invexans Pack for 28.8%, BPI France for 7.69% and employees for 6.3% –, Jean Mouton chairing the board of directors of 14 members, Christopher Guérin being general manager ;
– Very healthy financial situation, with a debt of €229 million at the end of June.
Challenges
– Strategic ambition 2022-24 “Winds of change”:
– concentration on 4 sectors and reorientation of the portfolio on electrification,
– €200 million investment in underwater high voltage by 2023 in Norway and the United States,
– deployment of the SHIFT Performance program
– financial objectives: €6 to 7 billion in turnover and operating margin between 10 and 12%;
Dynamic innovation strategy with €100 million invested in the 15 R&D centers (1,800 patents, 75 filed in 2022):
– serving customers and partners: intensification of the Platinum program, 540,000 users connected to digital platforms and services, such as ULTRACKER,
– deployment of solutions created within AmpaCity, a global innovation hub dedicated to cables for low-carbon electrification,
– development of fire safety technologies and doubling of connected objects
– internally, efficiency and intelligence: eco-design approach, Plug & Play cabling, use of digital twins to increase return on assets and limit working capital requirements;
– Environmental strategy aiming for net zero emissions in 2050:
– 2030 intermediate objectives: reduction of 46.2% in scope 1 and 2 CO2 emissions compared to 2019 and 24% for those emitted in scope 3 (suppliers),
– E3 performance model across the entire value chain;
– Progress in the electrification pure player strategy: sale of Telecom Systems and acquisition of the Finnish Reka Cables on the one hand, investment in a 3rd cable ship;
– Order book of €6.7 billion at the end of August.
Challenges
– Diversity of profitability between branches, buildings & territories being the least profitable;
–
Inflation, particularly in the price of copper, offset by the SHIFT Performance and Prime and Amplify plans and increases in sales prices and launch of Ultracker against shortages of semiconductors and raw materials;
– Launch of Nexans Fire Safety;
– After a decline in revenues and an increase in the net margin, 2023 objective of an operating profit between €570 and €630 million, and cash generation between €150 and €250 million;
– Launch of a share buyback program until the end of January 2024.
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