Nexans (+4.91% to 119.60 euros) shines at the top of the SBF 120 index after the presentation of its “Sparking Electrification” plan during its investor day in London. The cable specialist intends to “sustainably improve its performance and cash generation, and amplify its profitable growth in the electrification markets”. Its new strategic roadmap will focus on “strengthening its position in this area through new technological solutions and new market segments, all supported by artificial intelligence”.
Nexans will continue to develop its electrification activities “according to a selective and profitable approach”.
The company anticipates a compound annual growth rate for the electrification scope of between 3 and 5% (on an organic basis), as well as an increase of 350 million euros in adjusted EBITDA between 2024 and 2028.
Nexans forecasts an adjusted Ebitda of 1.15 billion euros for 2028, plus or minus 75 million euros, with the continued reorientation of the portfolio towards electrification activities.
1.2 billion euros of investment between 2025 and 2028
The cable specialist is also targeting a return on capital employed greater than 20% “thanks to improved profitability, rigorous working capital management and controlled investments”.
It plans to invest around 1.2 billion euros between 2025 and 2028 to stimulate growth.
The group also specifies that cumulative cash generation before mergers and acquisitions and capital transactions should be around 1.4 billion euros between 2025 and 2028, with a solid conversion rate above 45% in 2028.
Concerning its priorities in terms of capital allocation, the group aims for “a progressive dividend policy and a minimum distribution rate of 30% as well as share buybacks in order to avoid dilution”.
Nexans unveils its new strategy 15 days after announcing its disappointing third quarter turnover. Its revenues fell by 0.5% on an organic basis, to 1.68 billion euros compared to 1.76 billion euros expected by analysts.
Over this period, its Electrification activities however grew organically by 7.9% in the third quarter of 2024, “boosted by early strategic investments in the Energy Production & Transmission segment”.
In parallel with the presentation of its quarterly results, the group confirmed its financial objectives for 2024. It expects a gross operating surplus (Ebitda) of 750 million to 800 million euros and a normalized free cash flow of 275 million to 375 million euros.
