2004 First quarter sales

Paris, April 20, 2004 - Nexans announces sales of 1, 091 million euros for the first quarter of 2004.

At constant non-ferrous metals prices and exchange rates*, first quarter sales totaled 951 million euros, up from 914 million euros for the first quarter of 2003, representing growth of 3.9% (+1.3% at constant perimeter).

The strong growth of sales in North America and Asia, coupled with the sales reported by the recently acquired Kukdong and Furukawa companies in South Korea and Brazil, respectively, managed to offset weak markets in Europe, especially France.
A business-by-business analysis shows continued growth in Energy as other businesses remained stable.

The quarter was marked by a sharp rise in the price of non-ferrous metals, especially copper, for which the average price jumped 37% compared with the first quarter of 2003 (and 25% compared with the fourth quarter of 2003). The resulting adverse impact on the Group�s debt is evaluated to be approximately 70 million euros. It also affects the operating profits of the building business cables activity, for which it takes longer to pass on the rising costs of raw materials in the sales prices. However, active management of pricing, combined with a metals hedging policy limit the negative impact on margins.



Consolidated sales by business sector

in millions of euros

At current metal prices

At constant metal prices

At constant metal prices
and exchange rates
 

Q1 03

Q1 04

Q1 03

Q1 04

Q1 03

Q1 04
Energy 503 559 491 515 477 515

Telecom

134

130

133

126

126

126

Electrical Wires

267

333

248

241

244

241

Distribution and others

74

69

73

69

67

69

Total

978

1 091

945

951

914

951

* To neutralize the effect of variations in the purchase price of non-ferrous metals and thus measure its effective sales evolution, Nexans also calculates its sales using a constant price for copper and aluminum.

  • Energy (main activities - at constant metal prices and exchange rates) :
in millions of euros Q1.03 Q1.04
Infrastructure 184 200
Building 170 178
Industry 106 128

Despite weak demand for low and medium voltage cables in France and Germany, the cable market for infrastructure continued to expand.

Demand for cables for the building business was buoyed by the North American market, while competitive pressures continued to weigh on prices in Germany and France.

The volume increase in Industry Cables is related primarily to the inclusion of Kukdong in the Group�s consolidation scope.

 

  • Telecom (at constant metal prices and exchange rates)
in millions of euros Q1.03 Q1.04
Infrastructure 49 45
Private local aera networks (LAN) 45 48
Industry 32 33

The first quarter confirmed the stabilization of this activity already felt in 2003.

The infrastructure business continued to suffer from the stagnation of demand in emerging countries.

Cables for industry grew slightly, driven by the development of ADSL (high-speed Internet) networks and cables for the aerospace industry.

In North America, sales in the Private local area Networks were boosted by the recovery of demand for LAN copper and fiber optic cables.

 

  • Electical wires (at constant metal prices and exchange rates)
in millions of euros Q1.03 Q1.04
Wirerod 126 127
Bare Wires 29 28
Winding wires  90 86

The development of Nexans� Wirerod activities is satisfactory. The Winding Wire activities begin to reap the benefits of the restructuring carried out in North America in 2003 (reduction of overheads and elimination of low-margin manufacturing operations).

Consolidated Sales by geographical area

in millions of euros

Current metal prices

Constant metal prices

Constant metal prices
and exchange rates
 

Q1 03

Q1 04

Q1 03

Q1 04

Q1 03

Q1 04
Europe 752 786 737 710 722 710

North America

174 219 160 161 148 161

Asia

30 52 27 47 23 47

Rest of the World

22 34 21 33 21 33
Total 978 1 091 945 951 914 951

Sales growth during the first quarter reflects a sharp increase in sales volume in North America (+9.5% on a comparable consolidation scope), Asia (+13% on a comparable consolidation scope) and the Rest of the world (+17% on a comparable consolidation scope). This rise offsets low levels of activity in Europe (especially in France), due to the stagnation of industrial investment and the weakness of demand for telecom infrastructure cables.

 

Financial Calendar

  • June 3, 2004 : Annual Shareholders' Meeting
  • July 21, 2004 : publication of the 2004 first half sales and results
  • October 18, 2004 : publication of the 2004 third quarter sales

Related Document

Your Contact

Angéline Afanoukoe Press relations
Phone +33 1 78 15 04 67
Angeline.afanoukoe@nexans.com
Michel Gédéon Financial Communication
Phone +33 1 78 15 05 41
michel.gedeon@nexans.com

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.

http://www.nexans.com/