2005 first quarter sales: Continued increase in sales on a comparable scope of consolidation

Paris, April 20, 2005 - Nexans announces sales of 1,166 million euros (at current metal prices*) for the first quarter of 2005.
This figure complies with IFRS 5 (on discontinued operations) and therefore does not include the sales of the European and Chinese winding wire businesses, which are the subject of a planned joint venture/sale to Superior Essex announced in February 2005 and due to be completed within the first half of the year.

At constant non-ferrous metal prices** first quarter sales totaled 958 million euros, an increase of 3.5% compared with the first quarter of 2004, restated at comparable accounting methods and exchange rates (+2.5% on a comparable scope of consolidation). Based on an identical number of working days, these percentages would be respectively +5.2% and +4.1%.

Within an unsteady European economy, this growth demonstrates the Group's ability to significantly build on its positions in high added-value sectors which are less susceptible to economic fluctuations (copper telecom infrastructure cables, high-voltage and umbilical cables, automotive cables and harnesses, distribution) and to profit from its strengthened presence in higher-growth areas - North America and the Rest of the World.

The first quarter of 2005 also saw an improvement in margins - reflecting a reduction in fixed costs and a stabilization of raw materials prices following the disruption in the first quarter of 2004 caused by the substantial increases in non-ferrous metals and plastic prices.


* At current metal prices, first-quarter sales for 2004 totaled 1,091 (published) and 1,062 million euros (IFRS5, see Annex).
** To neutralize the effect of variations in the purchase price of non-ferrous metals and thus measure the effective underlying sales trend, Nexans also calculates its sales using a constant price for copper and aluminum.

Consolidated sales by business sector

(in million euros)

At constant metal prices

At constant metal prices and exchange rates

 

Q1 04 published

Q1 04
/IFRS 5
Q1 05 Q1 04

Q1 04
/IFRS 5

Q1 05
Energy
Telecom
Electrical Wires
Other
Total

582
126
241
2
951

582
126
209
2
919

632
134
190
2
958

589
125
242
2
958

589
125
210
2
926
632
134
190
2
958

 

  • Energy : growth of +4.5% at constant consolidation scope
    (main activities - at constant metal prices and exchange rates)
(in million euros)
Q1.04
Q1.05
Infrastructure 203 232
Building 247 250
Industry 130 139

The strong growth in sales of Energy cables for infrastructure was driven by energy equipment demand in North America and Brazil and by replacement orders following the winter storms in northern European countries.

Building cables held up well, reflecting stable sales in Europe, declining sales in the North American market, and very significant growth in Distribution sales in Europe.

The special cables business remains problematic, especially in Germany and France, while sales of automotive harnesses remain strong.


  • Telecom : growth of +6.1% at comparable consolidation scope
    (at constant metal prices and exchange rates)
(in million euros)
Q1.04
Q1.05
Infrastructure 45 54
Private Local Area Networks (LAN) 47 51
Industry 32 29

The Telecom activity continues its recovery, with a strong increase in sales driven by growth in copper infrastructure cables and related accessories.

Sales of cables for private Local Area Networks continue to progress in North America, with evidence of a slight recovery in Europe.

Cables for industry have suffered from increasingly tough competition between telecom equipment manufacturers.


  • Electrical Wires :down -5.7% at comparable consolidation scope
    (at constant metal prices and exchange rates)
(in million euros)
Q1.04
Q1.05
Wirerod 136 128
Bare wires 50 45
Winding Wires (excl. transaction with Superior Essex) 23 17

Sales in the Electrical Wires sector fell back, reflecting the impact of the slowdown in industrial investment in Europe, which in turn depressed this sector's end markets (wirerod and bare wires for other cable suppliers and the automotive industry; winding wires for engine manufacturers, the multimedia industry, household appliances, etc.).

More specifically, the decline in the Winding Wires activity which is currently the subject of negotiations with Superior Essex (and therefore not consolidated) has led the Group to anticipate a capital loss on disposal of around 20 million euros as well as a lower than anticipated reduction in debt levels (45 million euros, rather than the 50 to 60 million euros initially forecast). This capital loss has no effect on the Group's operating margin.


Consolidated sales by geographic area

(in million euros)

At constant metal prices

At constant metal prices and exchange rates
 

Q1 04 published

Q1 04
/IFRS 5
Q1 05 Q1 04 Q1 04
/IFRS 5
Q1 05
Europe
North America
Asia
Rest of the World
Total

710
161
47
33
951

680
161
45
33
919

701
156
47
54
958

715
160
50
33
958
685
160
48
33
926

701
156
47
54
958

The progress in sales in Europe (+2.3%) is satisfactory despite stagnant German and French markets.
The 2.5% increase in North American sales, at comparable consolidation scope, was driven by growth in the energy infrastructure and private telecom Local Area Network businesses, offsetting a slight slowdown in cables for the building industry and wirerod sales.
Sales in Asia remained stable at comparable consolidation scope: buoyant growth in cables for shipbuilding was offset by the effect of competitive pressures in the telecom sector.
The Rest of the World area was boosted by very significant investments undertaken by energy suppliers, especially in Brazil.

Financial calendar

  • June 2, 2005 : Annual Shareholders' Meeting
  • June 16, 2005 : Individual shareholders' information meeting in Toulon
  • July 21, 2005 : Publication of 2005 first-half sales and results
  • October 18, 2005 : Publication of 2005 third quarter sales
  • November 14, 2005 : Individual shareholders' information meeting in Grenoble
  • December 5, 2005 : Individual shareholder' information meeting in Lille

Annex

Consolidated sales by business sector at current metal prices

(in million euros)

At current metal prices

  Q1 04 published Q1 04
/IFRS 5
Q1 05
Energy
Telecom
Electrical Wires
Other
Total

626
130
333
2
1,091

626
130
304
2
1,062

710
142
312
2
1,166

 

Related Document

Your Contact

Angéline Afanoukoe Press relations
Phone +33 1 78 15 04 67
Angeline.afanoukoe@nexans.com
Michel Gédéon Financial Communication
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About Nexans

Nexans is the worldwide leader in the cable industry. The Group brings an extensive range of advanced copper and optical fiber cable solutions to the infrastructure, industry and building markets. Nexans cables and cabling systems can be found in every area of people's lives, from telecommunications and energy networks, to aeronautics, aerospace, automobile, railways, building, petrochemical, medical applications, etc. With an industrial presence in 29 countries and commercial activities in 65 countries, Nexans employs 20,000 people and had sales in 2004 of euros 4.9 billion. Nexans is listed on the Paris stock exchange. More information on www.nexans.com

http://www.nexans.com/