Nexans First-Half Year Results for 2007
26 Jul 2007
• Organic sales growth of cable businesses*: +12.9%
• Operating margin: +73%
• Net debt reduced by $A167 million
Paris, July 25, 2007 - The Board of Directors of Nexans chaired by Gérard Hauser, met on July 24, 2007 and reviewed the Group's consolidated financial statements for the 2007 first half-year.
- First half-year sales reached $A6,320 million compared to $A6,143 million at June 30, 2006.
- The operating margin totalled $A312 million over the period, compared to $A180 million in the first half of 2006, an increase of 73%. Operating margin as a percentage of sales has increased from first half 2006 to first half 2007 from 4.8% to 7.6% at constant non-ferrous metal prices.
- Net income (Group share) for the first half of the year totalled $A198 million, compared to $A352 million at June 30, 2006. In the first half of 2006, net income included a capital gain of $A248 million euros from the sale of distribution activities in Switzerland.
- Net financial debt totalled $A888 million at June 30, 2007, $A167 million lower than at December 31, 2006, reflecting a 141% increase in cash flow and good control of the working capital in an environment of strong growth.
Strategic priorities confirmed by excellent first half-year results
Commenting on the first half-year results, Gérard Hauser, Nexans’ Chairman and CEO, said: "The excellent results achieved by the Group in the first half of 2007 demonstrate the validity of the direction set by the Strategic Plan presented in January. The focus on energy infrastructures, industry priority markets such as transport and oil and gas businesses, and the withdrawal from upstream sectors, is orienting the Group to businesses with longer economic cycles. Growth is being achieved alongside an improvement in the balance sheet.
These characteristics, together with an ambitious investment program and an ongoing culture of operational improvement constitute the Group’s specific strengths. They will enable us to continue applying our policy of strong and profitable growth in the second half (1).. In view of these factors, we expect to achieve annual double-digit sales growth in our cable businesses, with second-half operating margin as a percentage of sales higher than in the first half. Furthermore, we are continuing to pursue our target of reducing debt, at a constant consolidation scope and at constant copper prices, compared with December 31, 2006."
Detailed analysis of business results
Key figures - First-half 2007
Energy
Sales in the Energy business totalled $A3,138 million euros in the first half of 2007, reflecting 12.6% organic growth. The main consolidation scope effect resulted from the integration of Olex, whose first half-year sales totalled $A231 million at constant non-ferrous metal prices.
Operating margin increased by 61.6%, rising from $A165 million in the same period last year to $A266 million at June 30, 2007.
Telecom
The sales of the Telecom activity totalled $A460 million at constant non-ferrous metal prices, representing organic growth of 15.5% compared to the first half of 2006.
Over the same period, operating margin doubled, rising from $21 million to $45 million.
Electrical Wires
The sales of the Electrical Wires businesses totalled $A478 million in the first half of 2007, compared with $A721 million at June 30, 2006, reflecting a reduction of approximately 33% in line with the Group's policy of refocusing only on its internal requirements.
The sale of the remaining winding wires businesses is in the process of finalisation.
Operating margin increased from $A3 million to $A6 million.
Sales and operating margin by geographical areas, excluding electrical wires
Financial calendar
September 24, 2007: Individual shareholder information meeting in Versailles^
October 18, 2007: Publication of 2007 third quarter sales
November 13, 2007: Individual shareholder information meeting in Strasbourg^
November 19, 2007: Individual shareholder meeting in Bordeaux^
January 31, 2008: Publication of 2007 annual consolidated results
(^ dates may be subject to change)
A full set of slides presenting the results, including the results by business, is available on the following link www.nexans.com/finance/financialpresentations . A detailed presentation of the financial statements, the first half-year sales report and the full text of the first half-year financial report will be available from July 27 on the Nexans Internet site at www.nexans.com
About Nexans
With energy as the basis of its development, Nexans, the worldwide leader in the cable industry, offers an extensive range of cables (copper, aluminium and optical fibre) and cabling systems. The Group is a global player in the infrastructure, industry and building markets. Nexans addresses a series of market segments from energy, transport and telecom networks to shipbuilding, oil and gas, nuclear, automotive, electronics, aeronautics, handling and automation.
With an industrial presence in more than 30 countries and commercial activities worldwide, Nexans employs 21,000 people and had sales in 2006 of 7.5 billion euros. Nexans is listed on the Paris stock exchange, compartment A of the Eurolist of Euronext. More information on http://www.nexans.com/
*Cable businesses and associated products (accesories), excluding electrical wires.
(1) This outlook, at constant metal prices, is based on the assumption that the worldwide economic context will remain favourable and comparable with that of the first half-year.
(2) Including the capital gain from the sale of the Swiss distribution activities amounting to $A248 million.
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