- Operating margin up 32% year on year to 195 million euros, despite a 1.7% organic decrease in sales volumes. All businesses contributed to improving profitability through the continuation of the Group’s strategic initiatives.
- Net debt down to 201 million euros at year-end due to a lower working capital and despite a cash outflow of 104 million euros related to restructuring plans
- Group net loss of 194 million euros after restructuring costs of 100 million euros and 142 million euros of asset impairment
Paris, February 18, 2016 – Today, Nexans published its financial statements for the year ended December 31, 2015, as approved on February 17, 2016 by the Board of Directors under the Chairmanship of Frédéric Vincent.
I – Overview of 2015
Commenting on the Group’s performance in 2015, Arnaud Poupart-Lafarge, Nexans’ Chief Executive Officer, said:
“The transformation of our Group has picked up pace and its effects are being felt. The initiatives undertaken as part of the strategic plan have enabled us to improve our operating margin and post a sharp reduction in net debt. This has been achieved against a backdrop of a lackluster market and contracting sales, which have particularly suffered due to the slowdown of the commodities markets.”
II –”Nexans brings Energy to Life” – the Group’s vision in practice
In 2015, Nexans took further steps to put into practice its corporate vision embodied in the slogan “Nexans brings Energy to Life”. All of the Group’s teams are motivated and determined to achieve this objective, which for Nexans means providing the energy and data that is essential for development in today’s society (in view of population growth, increasing urbanization, energy transition and climate change, the exponential increase in data transmission, mobility and transport).
In the energy infrastructure sector this resulted in the Group winning contracts for major projects in the submarine high voltage business in 2015, including projects to create power links between Norway and Germany (NordLink) and Norway and Scotland (NSN Link), thereby promoting the exchange of green energy between these countries.
Nexans is playing a key role in the transition to clean energy, supplying specialized photovoltaic cables and power cables for the Cestas solar farm in France and Fonte Solar in Brazil, as well as cables and special accessories for Los Cóndores (a new hydropower plant in Chile). The Group also recently signed a contract with Statoil to supply cabling and accessories for the Hywind Scotland Pilot Park – the world’s first floating wind farm, located off the Scottish coast.
Nexans is also making a significant contribution to modernizing networks across the globe. Having successfully carried out the AmpaCity project in Germany, which involved supplying the utility company RWE with a superconductor cable that was integrated into the electricity grid, the Group has now been chosen by AMSC (American Supraconductor) to design and produce a test superconductor system for the urban electricity grid in Chicago.
Nexans’ corporate vision also encompasses the transport sector. The Group has signed contracts with Airbus to supply in-cabin cables for aircraft and with the shipbuilders Fincantieri and Meyer Werft to cable latest-generation cruise ships. It has also been entrusted with providing Nexans Alsecure® fire-resistant cables and specific solutions for the new underground railway line in Istanbul, Turkey.
In the natural resources sector, Samsung Heavy Industries selected Nexans as its unique supplier of power, instrumentation and control cables for the new FPSO (Floating Production Storage and Offloading) platform in Egina, Nigeria, which will be brought into service for Total in 2017. This project represents the largest contract won by Nexans in this sector to date.
These examples illustrate the initial results of the Group’s transformation process and demonstrate the ongoing commitment of its worldwide teams to achieving excellence in all aspects of customer service.
III – Detailed business review for 2015
Sales for 2015 came to 6.239 billion euros at current metal prices and 4.604 billion euros at constant metal prices, representing a 1.7% 1 organic decrease compared with 2014. Following a flat six months, during which sales edged back 0.8% on an organic basis, the second half of the year was marked by the expected slower growth in submarine projects and contraction in business in the oil & gas and mining sectors, especially for AmerCable.
Operating margin totaled 195 million euros, up 32% on 2014 (148 million euros) representing 4.2% of sales at constant metal prices versus 3.2% in 2014.
The Group’s sales performance for 2015 reflects mixed operating contexts across its different businesses:
- High value-added businesses, which reported steady growth and which correspond to the submarine high-voltage, automotive harnesses and LAN cables and systems segments.
- Businesses that retreated significantly, mainly due to particularly difficult operating conditions in Brazil and Australia and in the oil & gas sector, with market environments that have progressively worsened since 2014.
- Businesses that are recovering, corresponding to cables operations in Europe and the Middle East, Russia and Africa Area, for which the Group is applying a selective commercial approach in line with the objectives in its strategic plan (sometimes to the detriment of volumes).
Year on year changes in sales by geographic area were as follows:
- Sales generated in Europe contracted by 2.1%, due to the combined effects of a still sluggish market and the Group’s strategy of focusing on higher value-added sales rather than on business volumes.
- Sales in North America were down 15.2%, mainly as a result of lower investment in the oil and mining sectors.
- South America also reported a year-on-year contraction (0.2%), primarily attributable to Brazil. Sales gradually picked up in Peru, however, and continued to grow in Colombia.
- With sales down 6.6%, performance in the Asia-Pacific Area reflects the persistent sales decline in Australia partially offset by a buoyant market for industrial cables in China, particularly LAN cables, railroad cables and automotive harnesses.
- The Middle East, Russia and Africa Area posted a 4.5% sales increase. Turkey reported a steep rise for the Distributors & Installers and Industry businesses, and in Lebanon sales swung upwards in the second half of the year.