2017 First-Half Results

Jul 27, 2017
  • Organic sales growth1 of 2.4%2  driven by a strong increase in submarine high-voltage operations (c. 40%) and despite a 32% decline for Oil & Gas sector activities3
  • Operating margin of 140 million euros, stable versus first-half 2016 (135 million euros) but up 36% on the second half of 2016 (107 million euros)
  • Net income before tax of 126 million euros, up by 80 million euros of which
    65 million euros resulting from the core exposure effect. Net income of
    92 million euros versus 29 million euros in first-half 2016
  • Net debt of 423 million euros (373 million euros at June 30, 2016)
  • Dividend payment (22 million euros), share buybacks (11 million euros) and acquisitions (12 million euros) in the first half of 2017


Paris La Défense, July 27, 2017 – Today, Nexans published its financial statements for the six months ended June 30, 2017, as examined by the Board of Directors at its meeting chaired by Georges Chodron de Courcel on July 26, 2017.

Numerous successes in the Group's various business sectors

The first half of 2017 saw a number of successes for the Group’s various business sectors.
For example, Nexans reaffirmed its commitment to the transition to clean energy via a 100 million euro contract it was awarded by the transmission system operator, TenneT, as part of the DolWin6 offshore wind farm project in the North Sea. Under this contract, Nexans will supply high-voltage cables capable of carrying a maximum output of 900 MW in order to provide the offshore direct-current link for the wind farm, which is scheduled for completion in 2023. Another example of the Group’s work in the area of renewable energy is the expertise and solutions it is providing for Fosen Vind – Europe’s largest onshore wind power project, based in Norway – which will ultimately double Norway’s wind power generation capacity and provide green energy to thousands of Norwegian households.
In the area of resources, BP renewed its trust in Nexans in first-half 2017 by signing a 5-year global framework agreement covering the engineering, procurement and construction of umbilical and Direct Electrical Heating (DEH) systems and ancillary equipment.
Also during first-half 2017, Nexans strengthened its ability to meet growing demand for submarine high-voltage power cables. The Group now wholly owns Nippon High Voltage Cable Corporation (NVC) – a Japanese company specialized in the production of high-voltage cables. By acquiring full control of this manufacturing facility, Nexans will be able to further develop its business with a view to capitalizing on the promising prospects in the global market for submarine high­voltage cables. Similarly, the Group plans to expand the operations of its Goose Creek production unit in the United States in order to serve the submarine high-voltage cables market.
In parallel, Nexans pursued its commitment to sustainable mobility by increasing its stake in G2mobility – a start-up that specializes in smart charging stations for electric vehicles – and winning a contract to supply and install some 150 charging stations in the Champagne-Ardenne region of France.
In the telecommunications sector, the Group launched Nexans Data Center Solutions in order to help hyperscale data center operators drive tomorrow’s hyper-connected world. Headquartered in North America, this new global business unit offers scalable and resilient connectivity services and solutions.
Lastly, Nexans put its CSR commitments for its own business units into practice during the first half of 2017 by inaugurating a 600 kW peak solar power system at its Liban Cables industrial facility in Lebanon. This system of photovoltaic panels will enable Liban Cables to reduce its greenhouse gas emissions by 750 tons a year.
The above success stories are just a few illustrations of how the Group is working towards its goal of helping to meet the world’s growing energy and data requirements and how it is mobilizing its teams to achieve that objective.

Consolidated sales for the six months ended June 30, 2017 came to 3,206 million euros compared with 2,951 million euros for the same period of 2016. At constant metal prices4, first-half 2017 sales amounted to 2,336 million euros, representing 2.4% organic growth. Excluding Oil & Gas sector activities – whose sales declined by 32% – year-on-year growth for the Group's other activities was 4.6%.
The Group pursued its strategic initiatives during the first six months of 2017 and, overall, they offset the negative 44 million euros cost/price squeeze effect, pushing up operating margin for the period by 43 million euros.
As a result, consolidated operating margin came in at 140 million euros (or 6% of sales at constant metal prices), on a par with the figures for first-half 2016 (135 million euros and 5.9%). The impacts of the various strategic initiatives were as follows:

  • The Group's drive to reduce fixed costs had a 15 million euro positive impact on operating margin before inflation, adding to the 84 million euros worth of reductions already achieved in 2015 and 2016. This mainly reflects improved productivity in submarine high-voltage operations and lower fixed costs in Europe.
  • Reductions in variable costs added 12 million euros to operating margin (compared with 25 million euros in first-half 2016). The program launched to scale back purchasing costs and step up industrial efficiency measures was continued but its overall effect was hampered by price rises for chemicals and plastics, which are generally passed on in sales prices but sometimes with a time lag.
  • "Market Leadership" initiatives had a 16 million euro positive effect on operating margin for the first half of 2017. The main positive contributions came from submarine operations, telecom activities and industrial segments excluding the Oil & Gas sector (an aggregate c.43 million euros), but their net impact was adversely affected by (i) a c.13 million euro negative contribution from Oil & Gas sector activities, and (ii) an impact of some 17 million euros arising from an unfavorable basis of comparison with first-half 2016, when demand from Utilities was high in Europe and prices were favorable in the LAN markets in North America.

Overall, the higher cost/price squeeze effect in the first six months of 2017 (44 million euros versus 29 million euros in the first half of 2016), combined with the particularly positive first-half 2016 contributions from the LAN and energy operators segments, created an unfavorable basis of comparison for first-half 2017. The Group expects to see an inverse effect in the second half of 2017, and operating margin should exceed the 107 million euros reported for the second half of 2016.

EBITDA totaled 211 million euros versus 203 million in first-half 2016. As a percentage of sales at standard metal prices the figure was stable year on year, amounting to 9.0% (8.9% in the first half of 2016). Over a rolling 12-month period, EBITDA came to 383 million euros.

The Group ended the first half of 2017 with operating income of 162 million euros, versus 90 million euros in the first six months of 2016. This year-on-year increase primarily reflects the combined impact of a 40 million euro positive core exposure effect (against a 25 million euro negative effect in first-half 2016) and 20 million euros in restructuring costs (compared with 13 million euros in the first six months of 2016).
Net financial expense amounted to 36 million euros (compared with 44 million euros in first-half 2016).

The Group recorded net income of 92 million euros in the six months ended June 30, 2017, up 63 million euros on the same period of 2016. This corresponds to a pre-tax profit of 126 million euros (versus 46 million euros in the first half of 2016), up 80 million euros, of which 65 million euros reflect the change in core exposure effects. The income tax expense was 34 million euros (versus 17 million euros).

Consolidated net debt totaled 423 million euros at June 30, 2017, up 50 million euros on June 30, 2016. The payment of dividends, share buybacks and external growth had an aggregated impact of 45 million euros in the first semester of 2017.

Commenting on the Group's first-half 2017 performance, Arnaud Poupart-Lafarge, Nexans' Chief Executive Officer, said:
"Despite a persistently tough economic environment (particularly in the oil sector and the South American market), the very good performance of our high-voltage activities enabled us to stay on track in the first half of 2017 and our operating margin held firm compared with first-half 2016 -– a period that saw exceptionally high margin contributions.
In addition, our current order books and business volumes augur well for a higher second-half performance than for the same period in 2016. In order to support the future growth of our submarine activities, in the second half of 2017 we intend to make the investments we need to strengthen our project production and installation capacities, particularly targeting the North American market."


Key figures for the first half of 2017

(in millions of euros)

H1 2016 H1 2017
Sales at current metal prices 2,951 3,206
Sales at constant metal prices 2,277 2,336
Operating margin 135 140
Operating margin
as a % of sales at constant metal prices
5.9% 6.0%
EBITDA 203 211
Operating income 90 162
Cost of debt (net) (30) (33)
Income taxes (17) (34)
Attributable net income 30 91
Diluted earnings per share (in euros) 0.68 1.97
Net debt 373 423


Operating margin by division

(in millions of euros) H1 2016 H1 2017
Distributors & Installers 52 29
Industry 34 33
Transmission, Distribution & Operators 63 79
Other Activities (14) (1)
Group total 135 140


Analysis by division

Distributors & Installers

The Distributors & Installers division posted sales of 906 million euros at current metal prices and 572 million euros at constant metal prices, representing a year-on-year organic decrease of 3.2%.
This performance mainly reflects an unfavorable basis of comparison with first half 2016 for the LAN cables segment in the United States and China. However, the negative trends of 2016 saw a correction in the first half of 2017, with the division's sales for the period coming in 4% higher than in the second half of 2016.
Sales of power cables for the building market edged back 0.4% year on year on an organic basis, but were up 4.2% compared with the second half of 2016. Price pressure was noticeable in all geographic regions in the first half of 2017.
The Middle East/Africa Area reported 10.1% organic growth (with particularly positive trends in Lebanon and Turkey), which partially offset the weak sales volumes seen in other areas.
Business in Europe was stable in volume terms, down by 0.9% on first-half 2016, despite a context of sales price erosion. Profitability was adversely affected in this region by temporary additional costs incurred due to the Group’s industrial preparation for the application of the new EU Construction Products Regulation (CPR) as from July 1, 2017.
Sales in North America declined 2.7% year on year, with the decrease in volumes in Canada that began in 2016 leveling off in the first half of 2017 but price pressure becoming tighter in the residential buildings segment. Positive developments in the United States were not sufficient to offset these effects.
In South America sales decreased 9.4%, as business was weighed down by the natural disasters that occurred in the first quarter of 2017 in Peru and Chile as well as by the unsettled political environment in Brazil.
In the Asia-Pacific Area, sales dipped 1.6% compared with first-half 2016, reflecting the combined impact of fiercer competition in Australia and growth in South Korea.

Sales of LAN cables and systems were down 11.4% on an organic basis (including volume and price effects), reflecting an unfavorable basis of comparison with first-half 2016 when this segment's performance was particularly strong.
The Group launched Nexans Data Center Solutions (NDS) in the first half of 2017 – a new global business unit designed to support global hyperscale data centers – which is expected to have a positive impact on sales as from the second half of the year.

In this context, operating margin for the Distribution & Installers division fell from 52 million euros in first-half 2016 to 29 million in the first six months of 2017 (26 million in the second half of 2016). The year-on-year decrease was due both to the high basis of comparison for the first six months of 2016 – when sales of LAN cables were unusually high – and the fact that the recovery in sales of power cables for the building market in Europe is still in its early stages.



Sales for the Industry division totaled 691 million euros at current metal prices and 587 million euros at constant metal prices, representing a year-on-year organic decrease of 0.7%.
Sales of automotive harnesses continued to fare well, climbing 2.5%, fueled by business in Europe and China, but margins were eroded slightly due to the reorganization measures that were put in place during the period and are still in progress.
The Group plans to stop its harness manufacturing activities for the construction vehicles market in the third quarter of 2017.
Activities related to the Oil & Gas market were down 39.9% on an organic basis compared with first-half 2016. AmerCable reported a 5.5% year-on-year increase (10.4% versus the second half of 2016) but this was not sufficient to fully offset the contraction in business volumes in Asian shipyards, which adversely affected margins despite the restructuring measures carried out in South Korea.
Conversely, the wind farm, aeronautical, medical and robotics segments once again delivered double-digit growth (as they have for over a year now), propelled by growth markets which have resulted in solid order books. At the same time, sales in China were boosted by higher demand for train cables.
Despite the 0.7% overall organic sales decrease (due to a less favorable mix for harnesses and lower sales in China and South Korea), operating margin for the Industry division came to 33 million euros. This performance was more or less unchanged from first-half 2016, but represents an increase on the second half of 2016 when operating margin amounted to 25 million euros. As a percentage of sales at constant metal prices, operating margin remained stable in the first half of 2016 and 2017 at 5.7% - the drop in margins in shipbuilding being offset by the positive dynamics of the other segments.


Transmission, Distribution & Operators

Sales generated by the Transmission, Distribution & Operators division amounted to 1,198 million euros at current metal prices and 1,027 million euros at constant metal prices, representing 8.7% organic growth compared with the first six months of 2016. This overall growth masks a strong disparity between the performances delivered by (i) the Group’s project-based activities (which account for 21% of Nexans’ consolidated sales) and the Operators business, and (ii) the Distribution business.

The generally low spending trend for energy operators that was seen in the second half of 2016 continued into the first half of 2017 and resulted in an overall year-on-year organic sales decrease of 9.7% for the Distribution business. The effect of this trend was felt in all geographic regions except Asia-Pacific and North America which reported sales rises of 10.5% and 20.8% respectively. However, the end of 2016 seems to have marked the low point as the business delivered organic growth of 1.5% compared to the second half of 2016.
In Europe, following an extremely morose end of 2016, with particularly significant volume contractions in France, Germany, Greece and Italy, business gradually picked up during the first half of 2017. Overall, sales decreased 17.7% year on year on an organic basis in this region but period-on-period organic growth came to 6.7%. Judging by the segment’s current order books, volumes are expected to rise in the second half of 2017.
In South America, sales fell 27.5% on an organic basis, as the region continued to be adversely affected by the lack of overhead power line contracts in Brazil and the natural disasters in Peru and Chile. However, the Group expects to see an improvement during the third quarter of 2017.
Similarly, in the Middle East/Africa Area sales retreated by 19.7%, mainly in Morocco due to a decline in export sales and lower demand for power transformers.

Sales for this business climbed 12.5% year on year on an organic basis, continuing the robust momentum that began in the first half of 2016. This trend – which was seen in all geographic regions, albeit with a mixed picture across the various countries – helped push up operating margin for the Operators business in first-half 2017.
In Europe (which reported a 9.3% year-on-year sales increase), demand was strong in France and Belgium, both for optical fiber cables and telecom accessories.
At the same time, the market in Switzerland showed signs of recovery whereas the Scandinavian markets (Norway and Denmark) slowed.
In the business's other geographic regions – where telecom-related operations are less prevalent – demand remained high, with some areas reporting double-digit sales growth.

Land high-voltage
The recovery that began for this segment in the first half of 2016 continued during the first six months of 2017, with organic sales growth coming in at 16.1%.

Submarine high-voltage
The submarine high-voltage segment delivered year-on-year organic sales growth of 38.8% (including the adverse impact that lower capital expenditure levels in the Oil & Gas sector had on sales of umbilical cables). As forecast, this robust performance was led by production and deliveries under contracts such as NordLink, Beatrice, Maritime Link and Monita. The positive trend is expected to continue into the second half of the year when the start-up of production and deliveries under orders for umbilical cables taken during the second half of 2016 will begin to contribute to the segment’s sales figure.
The Group consolidated its production capacity in the first half of 2017 by taking over full ownership of its high-voltage plant in Japan – NVC.

Operating margin for the Transmission, Distribution & Operators division as a whole came to 79 million euros. This 27.8% organic increase compared with first-half 2016 was driven by the sharp rise in sales for the submarine high-voltage segment and demand for telecom infrastructure cables.


Other Activities

Other Activities – which essentially corresponds to sales of copper wires – reported sales of 149 million euros at constant metal prices, representing an organic decrease of 2.5% compared with first-half 2016.
Operating margin for this segment was a negative 1 million euros, reflecting the fact that this item includes central costs that cannot be allocated to the various businesses and which therefore offset the profit derived from sales of copper wires.


A conference call is scheduled today at 3:00 p.m. (Paris time).
To take part, please dial one of the following numbers:

  • In France: +33 (0)1 70 77 09 36
  • In the United Kingdom: +44 (0)203 367 94 54
  • In the United States: +1 646 722 4939

The local numbers to call to listen to a replay of the conference (available within 2 hours) are:

  • In France: +33 (0)1 72 00 15 00
  • In the United Kingdom: +44 (0)203 367 9460
  • In the United States: +1 877 642 3018

To listen to the conference, when requested, please enter 309957 followed by the hash (#) sign.


Financial calendar

  • November 7, 2017:  2017 Third-quarter financial information


NB: Any discrepancies are due to rounding
This press release contains forward-looking statements which are subject to various expected or unexpected risks and uncertainties that could have a material impact on the Company's future performance.
Readers are also invited to log onto the Group’s website to read the full text of the annual report for 2016, including the risk factors and uncertainties for 2017-2018, the 2016 financial statements, which include in particular the risks related to the investigations on anti-competitive behavior launched in 2009 (see Note 30 a) to the consolidated financial statements, “Antitrust Investigations”), as well as chapter 3 of the 2017 half-year financial report on risk factors and the main uncertainties.

The Group’s outlook for the second half of 2017 and beyond is subject to several major uncertainties:

  • the continued impact of depressed prices in Oil & Gas industries on customers’ capital expenditure;
  • the crisis in shipbuilding and the construction of offshore platforms, particularly in Asia;
  • the deteriorated economic and political situation in South America, coupled with the impact of recent natural catastrophes which are impacting demand, as well as exchange and credit risks;
  • the impacts of the political crisis in Qatar on Nexans’ activities in the region;
  • the economic and political environment in the European Union and the United States, with potential major changes in trade policies (customs protection, embargoes, etc.) and tax systems, including the potential impact of Brexit;
  • the volatility in LAN projects in the US;
  • the risk that market conditions will prevent the projected results of restructuring of the Group’s business portfolio from being achieved at the planned pace;
  • inherent risks related to carrying out major turnkey projects for high-voltage submarine cables, which are exacerbated by concentration on a low number of large-scale projects (Maritime Link, Nordlink, Beatrice, NSL, East Anglia One) and the high load of the relevant factories;
  • the risk that certain R&D and innovation programs designed to improve the Group’s competitiveness experience delays or do not fully meet their objectives;
  • the timeframe and the economic impacts of the market transition to building wires and cables complying with the new European CPR (Construction Products Regulation).



1- Organic growth is defined as the difference between (i) standard sales for the current period of the current year (year Y) calculated at constant non-ferrous metal prices, and (ii) standard sales for the same period of the previous year (year Y-1), calculated at constant non-ferrous metal prices and applying the exchange rates prevailing in year Y and based on the year Y scope of consolidation.

2 - The first-half 2017 sales figure used for like-for-like comparisons corresponds to sales at constant non-ferrous metal prices adjusted for the effects of exchange rates and changes in the scope of consolidation. Exchange rates and changes in the scope of consolidation impacted sales at constant non-ferrous metal prices by a positive 37 million euros and a negative 34 million euros respectively.

3 - Sales for Oil & Gas sector activities were estimated by aggregating (i) sales of cables for oil and gas exploration, (ii) sales of umbilical cables, and (iii) sales generated by Asian shipyard activities.

4- To neutralize the effect of fluctuations in non-ferrous metal prices and therefore measure the underlying sales trend, Nexans also calculates its sales using a constant price for copper and aluminum.



Appendices to be downloaded :

  1.  Consolidated income statement
  2. Consolidated statement of comprehensive income
  3. Consolidated statement of financial position
  4. Consolidated statement of cash flows
  5. Information by reportable segment
  6. Information by major geographic area
  7. Information by major customer

Audit procedures have been carried out on the consolidated financial statements. The Statutory Auditors' report will be issued following their review of the management report.


Your Contact

Catherine Garipoglu

Corporate Communication

Contact us

Topics on which you wish to get more informations:

Required fields*

Please check your entry and try again.

An email address must contain a single @

Personal data protector

You have the right to object to the processing of your personal data and/or their use for direct marketing or commercial purposes

Thank you!

Thanks for contacting us. We will be in touch with you shortly.


An error occurred. Please try again.