(BFM Bourse) – After many disappointments for its shareholders during the previous decade, the French cable company has clearly exceeded its objectives in 2021 and reduced its debt to an all-time low. Now fully focused on the electrification markets, Nexans considers itself in a good position to seize the full potential of the energy transition.
Exceptional results for Nexans, especially compared to those posted by the group ten years ago, in the face of strong competitive pressure in historical markets such as terrestrial high voltage and entangled in its own operational problems, particularly in submarine cables. The figures for the past financial year bear witness to the company’s dazzling recovery at the end of its “New Nexans” three-year strategic plan launched in 2019. A success hailed by the stock market, with a jump in the share price of 5.19% to 81.05 euros around 10 a.m. Wednesday, but also by the S&P Global Ratings agency, which raises Nexans’ credit rating.
In 2021, Nexans’ sales calculated according to industry standards, i.e. at a constant copper price, i.e. in this case $5,000 per tonne (all manufacturers automatically passing on the variations metal price to customers), increased by 6% compared to 2020 to reach 6.054 billion euros, representing organic growth of 8.3%, driven by strong demand and favorable mix/price management (as indicative, not restated for copper price inflation, organic growth reached +26%).
Ebitda (earnings before interest, taxes, depreciation and amortization) climbed by more than 33% to 463 million euros, materializing an Ebitda margin rate of 7.6%, up more than 1.5 points compared to 2020 (and almost double what it was ten years ago), thanks to selective growth, effective management of raw material supply and cost inflation, and reduction in structural complexity thanks to the New Nexans plan.
A net debt at the floor
The increase in operating profit reached +37%, at 338 million euros, while net profit more than doubled to 164 million euros. Enough to consider the distribution of a dividend of 1.2 euros per share for the financial year, up 71% over one year.
At the same time, net debt fell further to reach a historic low point of 74 million euros (compared to 179 million euros at December 31, 2020), due to the following elements, thanks in particular to operating cash flow of 389 million euros, including a free cash flow of 179 million.
In the process, S&P Global Ratings raised the long-term credit rating assigned to Nexans from BB to BB+, the highest in the “speculative” category. In other words, Nexans is only one step away from an “Investment Grade” rating, which is a mandatory eligibility criterion for certain bond investors.
“Our results for 2021 demonstrate that we are perfectly in line with the steps that structure our 10-year “New Nexans” industrial vision, presented in the summer of 2018, and of which we have just closed the first chapter. present at the second stage, to transform the group into a pure player electrification across the entire value chain. We are confident, we are determined. Our “Winds of Change” strategy is clearly defined and our roadmap perfectly established. We are following it step by step and as rigorously as we have over the past three years,” said Chief Executive Officer Christopher Guérin. the company.”
In line with its ambition “to electrify the future” and the new 2022-2024 part of the plan, Nexans says it is approaching the new exercise “with confidence”. In 2022, management anticipates Ebitda of between 500 and 540 million euros and normative free cash flow generation of between 150 and 200 million euros.
Guillaume Bayre – ©2022 BFM Bourse
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