2003 Third quarter sales - Nexans: Year-end targets confirmed are maintained as depressed economic climate continues

Paris, October 15, 2003 - Nexans (Paris: NEX.PA) today announced sales of 965 million euros for the third quarter of 2003. Sales for the first 9 months of the year amounted to 2,957 million Euros.

At constant non-ferrous metal prices and exchange rates, third quarter sales amounted to 944 million euros compared with 978 million euros for the same quarter last year, down by 3.5% (a fall of -6.4% at constant consolidated scope). For the first nine months of the year, sales amounted to 2,888 million euros, down by 3.2% compared with the same period last year (-4.9% at constant consolidated scope).

In a continuing depressed economic environment, especially in France, that remains marked by strong competitive pressure, Nexans does not discern any signs of upturn in the economy. Its policy of strict cost control means however that it can maintain generally its 2003 targets.

Consolidated sales

In millions of euros

At current metal prices and exchange rates

At constant metal prices and exchange rates

 

2002

2003

2002

2003

Third quarter

Second quarter

First quarter

Total at September 30

1,039

1,147

1,081

3,267

965

1,014

978

2,957

978

1,026

981

2,985

944

999

945

2,888

Sales by business sector at constant metal prices and exchange rates

In millions of euros

Q3

First 9 months

 

2002

2003

2002

2003

Energy

Telecom

Electrical wires

Distribution and other

Total

532

134

245

67

978

533

131

214

66

944

1,570

410

784

221

2,985

1,567

408

708

205

2,888

  • Energy:  (main activities)
In millions of euros  Q3.02 Q3.03
Infrastructure   209 209
Building   194 196
Industry 110 115

Energy sales remained stable compared to those of the third quarter last year, after including the impact of sales of 28 million euros resulting from the consolidation of Kukdong and the energy cable subsidiary of Furukawa in Brazil. But weak industrial capital expenditure and constant price pressure in the Building activity are adversely affecting performances in this sector. In this environment of stiffer competition, and out of a number of investigations carried out by the competition authorities in recent years, Nexans is currently involved in two investigations (in France and in Germany) relating to certain power cable markets. At the present time, the company has not received any notification arising from these investigations.

Nexans remains confident in the prospects of the energy market: the recent power failures in the United States, Canada and Italy have highlighted the lack of sufficient investment in electrical infrastructure in many countries, giving rise to hope that the major national operators will review their policies.

  • Telecom:
In millions of euros Q3.02 Q3.03
Infrastructure 57 51
Private networks 52 50
Industry  25  30

As previously indicated, the sales level of the telecommunications activities have now stabilized and are continuing to benefit from ADSL deployment in Europe.

  • Electrical wires:
In millions of euros  Q3.02 Q3.03
Wirerod 132 109
Bare wires  25 25
Winding wires 88 80

The lower figure for Electrical Wires sales essentially reflects the difficulties on the Winding Wires market and the weak sales of Wirerod, particularly in North America. In Wirerod, Nexans has compensated for the weak external market by inter-group sales, to ensure that the plants' workloads remain at a satisfactory level.

  • Distribution:
In millions of euros Q3.02 Q3.03
Distribution 67 65

The sales of the Distribution activity have been maintained at a satisfactory level.

The legal proceedings underway for several years between Nexans and Norwegian authorities concerning an alleged illicit agreement on list prices between several distribution companies have ended, and the case has been settled with no negative impact on profit.

Additionally, the negotiations with Platinum Equity concerning the sale of the distribution activities in Norway have ended, after Nexans rejected a renegotiation of the price by the buyer.


Outlook for 2003

The operational conditions of the cable market still remain just as difficult and there is no sign of an upturn in the countries in which Nexans operates.
In view of this context, which is broadly in line with Nexans' initial expectations, the Group is continuing to strictly apply its policy of stringent management controls, and maintains generally the objectives for its operating margin and financial ratios it presented to the markets at the close of the first half-year.


Financial calendar

  • Publication of 2003 sales and results: February 2, 2004.

 

Related Document

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. The program is completed by superconducting materials and components, cryoflex transfer systems and special machinery for the cable industry. With an industrial presence in 28 countries and commercial activities in 65 countries, Nexans employs 17,150 people and had sales in 2002 of euros 4.3 billion. Nexans is listed on the Paris stock exchange. More information on http://www.nexans.com