2012 Full-Year Results

Operational improvement in the second half despite worsened economic conditions

  • 2012 sales stable at constant scope, metal prices and exchange rates1
  • High voltage underwater cable business improved in the second half
  • 2012 operating margin rate at 4.2% 2
  • Net debt of 606 million euros at December 31, 2012
  • Proposed dividend of 0.50 euro per share 3
  • Launch of a study of a plan to realize 70 million euros in savings over time
  • 2015 operating margin target: 350 to 400 million euros


Paris, February 7, 2013 - The Nexans Board of Directors meeting on February 6, 2013, under the chairmanship of Frédéric Vincent, approved the Financial Statements for 2012.

Net sales for 2012 totaled 7.178 billion euros compared with 6.920 billion euros in 2011. At constant non-ferrous metal prices1, the figure is 4.872 billion euros compared with 4.594 billion euros in 2011.
At constant exchange rates and scope, sales were unchanged on 2011(-0.3%)4.

The operating margin totaled 202 million euros, that is, 4.2% of sales at constant non-ferrous metal prices, compared with 5.7% in 2011. As expected, second-half 2012 profitability (4.7%) was higher than in the first half (3.6%) thanks to the improved situation for underwater cable business while the other businesses reported varying performances depending on the geographic area.

The 2012 operating profit totaled 142 million euros, after restructuring costs and asset impairment. In 2011, an operating loss of 43 million euros5 resulted in particular from a 200 million euros reserve relating to a fine that may be imposed on Nexans following the statement of objections received on July 5, 2011, from the European Commission’s Competition Directorate for anti-competitive behavior.

The net financial charge came to 112 million euros compared with 1106 million euros in 2011, and the tax charge to 5 million euros compared with 31 million euros in 2011.

As a consequence, the net income (Group share) for 2012 totaled 27 million euros. It was a negative 178 million euros at December 31, 2011.

The Board of Directors will put to the General Shareholders’ Meeting, called in the first half of 2013, a proposal to pay a dividend of 0.5 euro per share for 2012.

The consolidated net debt was 606 million euros at December 31, 2012, compared with 222 million euros a year earlier. This change is mainly attributable to the acquisition of AmerCable in the United States accounting for 211 million euros and Shandong Yanggu in China accounting for 127 million euros.
These acquisitions reflect the Group’s growth strategy: AmerCable allows a stronger position in the growth sector of cables for mining equipment and the oil and gas industries, while Shandong Yanggu provides a strategic presence on China’s rapidly growing energy infrastructure market.

On November 26, 2012, Nexans signed an amendment to the March 27, 2011 agreement with its lead shareholder, the Chilean group Madeco. The main point of this amendment is to allow Madeco to raise its maximum stake in Nexan’s equity from 22.5% (as stipulated in the initial agreement) to 28% of the shareholders’ equity and voting rights, thereby enabling Madeco to consolidate its position as reference shareholder and long-term partner. The amended agreement new term is November 26, 2022. Until November 26, 2015, Madeco undertakes to limit its shareholding to 28% of the equity (standstill) and to maintain a minimum shareholding of 20% of the company’s equity (lock-up), or 25% once this threshold is exceeded.

Furthermore, the Group consolidated its financial situation by issuing a convertible bond of 250 million euros, reaching maturity on March 19, 2018, by increasing the amount of its syndicated credit facility from 540 to 600 million euros and by relaxing the covenant of the limit of net debt as a multiple of EBIDTA from 3 to 3.5, for the period January 1, 2013 to December 31, 2014.

Referring to the 2012 results, Frédéric Vincent, Chairman and CEO said:
“In 2012, numerous strategic initiatives were implemented, such as the acquisition of AmerCable in the United States and Yanggu in China, as well as the launch of the project to build a plant in South Carolina for land high voltage cables. Nonetheless, they occurred against the backdrop of worsened economic conditions in the second half of 2012 and implementation difficulties for submarine high voltage energy contracts, and the 2012 results did not meet expectations. The Group did however keep its main balance sheet items under control.

For 2013, the economic context in certain parts of the world is unclear (Brazil and Australia) or even subject a recession (Europe). High voltage business will see its profitability improve without, however, reaching a level considered normal. Given that the action plans launched or under review will produce only marginal effects in 2013, the Group is currently expecting operational profitability to be roughly the same as in 2012.

In this context, the Group would like to adopt the means to protect and restore its competitiveness, contain its costs and pursue the rationalization of its organization. Consequently, a study will be launched of a plan having as its objective, savings in the order of 70 million euros in Europe over time relating to land high voltage cables, special cables for industry and administrative structures in general. The Group will table the subject with the relevant employee representative bodies in the third quarter of 2013.

Additionally, at its January 14 meeting, the Board of Directors approved the main directions set in the 2013-2015 strategic plan in terms of markets, products and industrial policy. The actions included in this strategic plan are designed to reach an objective for the Group, assuming an unchanged economic climate, of raising its operating margin by 2015 to 350 to 400 million euros and to approximately double its return on capital employed.”


2012 key figures

(in millions of euros) At constant non-ferrous metal prices
  2011 2012
Sales 4,594  4,872 
Operating margin* 261  202 
Operating margin rate (% of sales) 5.7%  4.2% 
Net income (Group share) (178) 27 
Diluted EPS (in euros) (6.21)  0.90 

 * In 2011, the operating margin of the Other Activity segment was restated to include 5 million euros following the adoption of the revised IAS 19 accounting standard. See the appendices to the consolidated financial statements, note 3.

Detailed analysis by business sector

Sales breakdown by business sector

  2011 2012   Organic growth
(in millions of euros) At constant non-ferrous metal prices At constant non-ferrous metal prices
Transmission, Distribution & Operators 2,090   2,088    -3.9%
Industry  991  1,195   3.7% 
Distributors and Installers  1,217 1,285     1.8%
Other  296 304    2.8% 
Group total 4,594   4,872   -0.3% 


Operating margin by business sector

(in million of euros) 2011 2012
Transmission, Distribution & Operators 143   70
Industry  36 44
Distributors and Installers 70  78
Other*  12  10
Group total  261 202

 * In 2011, the operating margin of the Other Activity segment was restated to include 5 million euros following the adoption of the revised IAS 19 accounting standard. See the appendices to the consolidated financial statements, note 3.


Transmission, Distribution and Operators

In 2012, Transmission, Distribution and Operators sales totaled 2,088 million euros compared with 2,090 million euros in 2011, that is, an organic decrease of early 4%. Shandong Yanggu sales, which were consolidated effective from September 1, 2012, are included. This change reflects various trends depending on the geographic area and activity.

Submarine Cables and Systems

Submarine cables and systems business accounted in 2012 for around 25% of the sales of the Transmission Distribution and Operators segment. Compared with 2011, it contracted organically by 6.6% (-24% at June 30, 2012).

The operational difficulties in the first quarter resulted in production and invoicing delays, and impacted heavily on the operating margin.
To remedy this situation, the Group implemented a wide-ranging action plan including, in particular, changes to management structures, a strengthening of the organization and inspection procedures, stepped-up training and the mobilization of employees to reach shared targets.

This set of measures, designed to rectify profitability structurally, led to a significant production increase. This action plan should also lead to gradually returning by the end of 2013 to the operational performance expected for this type of activity. The efforts undertaken will therefore be continued in many areas throughout 2013.

The rate of tender proposals submitted was very high in 2012. At the end of October, the Group announced it had signed a historic contract for approximately 300 million euros with the Italian transmission grid operator Terna. Nexans will supply and install a 500 kV HVDC (High Voltage Direct Current) cable measuring more than 400 kilometers in length between Italy and Montenegro across the Adriatic Sea. This contract adds further weight to the Group’s leading position in the submarine HVDC interconnection segment.

At end December 2012, the order backlog for this activity, up sharply compared with the end of 2011, represented more than two and half years’ activity.

Land High Voltage

In 2012, land high voltage cables and systems business accounted for around 13% of the Transmission, Distribution and Operators segment’s sales. It is unchanged on 2011 at a relatively low level despite the third-quarter upswing, especially in the Gulf States.

Security conditions in Libya prevented the Group from resuming its installation activity in this country following its interruption in early 2011. On the other hand, in 2012, the Group won a significant contract from the Libyan national operator for the supply of 245 kV cables. The first deliveries are scheduled in the first half of 2013.

The operating margin of this activity suffered in particular from the ongoing highly competitive and demanding nature of this business in the Gulf States.

At the end of December 2012, the order backlog for this business equated to approximately one year’s activity.


Medium and low voltage cables and accessories for power distribution grids accounted for around 53% percent of the Transmission, Distribution and Operators segment’s sales in 2012. This is an organic decrease of 4% compared with 2011.

In Europe (around 47% of sales), activity improved, although there are wide differences between countries. The activity is very strong in France, despite a temporary slowdown at the end of the year. Sales were also up in Norway, but down in Germany and Italy. The activity in Greece, mainly export-oriented, benefited from the recovery in Libyan orders.
In North America (around 8% of sales), strong growth was reported for both Canada and the United States.

In South America (around 17% of sales), the slowdown in overhead power line projects in the second half resulted in the level of business contracting overall.
A drop in activity was also observed in the Asia-Pacific area (around 14% of sales). This change is mainly attributable to soft demand in Australia and South Korea.
Lastly, in the Middle East, Russia and Africa area (around 14% of sales), strong demand in Lebanon only partially offset the drop in Egypt, Russia and Morocco.

Telecom Operators

In 2012, cables and components for telecommunication networks represented around 9% of the Transmission, Distribution and Operators segment’s sales. It is 3% higher compared with 2011.

For fiber optic cables and components, sales were up sharply thanks to strong demand in Europe. On the other hand, copper cables contracted largely because of slowing investment in Brazil at the end of the year.

The operating margin for Transmission, Distribution and Operators came to 70 million euros for 2012, that is, 3.4% of sales, compared with 143 million euros and 6.9% for 2011. This substantially reflects the impact of contract implementation difficulties experienced for Transmission and the weaker performance in Australia and Brazil.


In 2012, Industry booked sales of 1,195 million euros, up from 991 million euros in 2011, that is, an organic rise of almost 3.7%. Effective from March 1, 2012, AmerCable (since renamed Nexans AmerCable) was consolidated in Nexans accounts and its performance included in the “Industry” segment.
In 2012, performances between the various sectors that make up the Industry segment were variable.

The Group reported an 8.5% increase in automotive harnesses and cables for industry. In this segment, the Group benefits from its excellent positioning with prestige German automakers.
Activity varied between transportation business segments.
The aeronautical segment continued its growth in 2012, driven by this industry’s upturn in Europe, where the Group occupies a tier one position. Railways sales were, on the other hand, down sharply following the shutdown of investment programs in China, especially its high-speed projects.
For this activity, the Group did however see stronger tender activity in the second half of 2012 without that having translated at this stage into a recovery in sales.
Shipbuilding progressed marginally. This trend reflects a strong increase in demand for oil industry-related applications (now accounting for more than half of sales) whereas traditional shipbuilding (cargo and cruise ships) has contracted.

The resources segment sales rose significantly on the back of oil industry applications and mining exploration.
The acquisition of AmerCable, effective from March 1, 2012, considerably strengthened the Group’s position in these promising markets. This new entity has already outperformed expectations and its integration is proceeding according to plan. Slower demand in mining extraction noted in the fourth quarter 2012, especially in Australia, only had a limited impact on the Group insofar as most of the Group’s sales are for the replacement of operating cables in high demand.

Sales for automation and capital goods fell sharply. After a relatively strong start to the year, activity slowed, mainly in Europe which accounts for an overwhelming share of sales in this sub-segment. The Group introduced measures to adapt work hours in some plants in response to these tighter business conditions.

The operating margin comes to 44 million euros, that is, 3.7% of sales, compared with 36 million euros and 3.6% of sales in 2011. This increase is largely attributable to the improved performance in automotive harnesses and the positive contribution of Nexans AmerCable which offset slower business in Europe.

Distributors and Installers

Distributors and Installers sales came to 1.285 billion euros in 2012, compared with 1.217 billion euros in 2011, that is, an organic increase of almost 2%. The soft European market was therefore more than offset by the dynamic activity in the other geographic areas.

In Europe (39% of sales), business contracted by around 6% compared with 2011. After an initial strong first quarter, demand slowed on the Group’s main markets.
In North America (24% of sales), energy cable business was trending well both in Canada and the United States, but sales of LAN cables dropped slightly.
In South America (13% of sales), the Group reported double-digit growth for Brazil, Peru and Chile, and more moderate growth in Colombia.
In Asia-Pacific (15% of sales), sales progressed in Australia and New Zealand as a result of successful repositioning with the market’s main players. Activity was, however, down in South Korea.
Finally, in the Middle East, Russia and Africa area, activity was drawn upwards by the dynamic Lebanese, Turkish and Moroccan markets.

The operating margin came to 78 million euros, that is, 6.1% of sales, compared with 70 million euros and 5.8% in 2011.

Other activities

Since January 1, 2012, the “Other activities” segment refers to Electrical Wires activity and other activity not allocated to the business sectors.

In 2012, sales rose by almost 3%, mainly driven by the volume of Electrical Wires sales, principally in North America.

The operating margin came to 10 million euros, compared with 12 million euros in 2011.


Financial calendar

  • March 13, 2013: Individual shareholder information meeting in Lyon*
  • April 25, 2013: First-quarter 2013 sales figures
  • May 14, 2013: Annual General Shareholders’ Meeting
  • May 30, 2013: Individual shareholder information meeting in Lille*
  • July 25, 2013: First-half 2013 results

* Date to be confirmed


Readers are also invited to log onto the Group Internet site where they can in particular consult the presentation of the annual results to analysts, the full financial statements closed at December 31, 2012 and the management report for 2012 including details of risk factors for the Group and confirmation of the risks linked to competition surveys in Europe, the United States, Canada, Brazil, Australia and South Korea for anti-trust conduct in the underwater and underground power cable segment, together with the associated services and equipment, the results and consequences of which could have an unfavorable effect on the Group’s results and so its financial situation.

In accordance with the AMF’s recommendation of February 5, 2010, Nexans advises that the audit procedures for the financial statements referred to in this press release have been carried out and the auditors’ report regarding certification is in the process of being issued.

Information of a prospective nature in this press release is dependent on the risks and uncertainties, known or unknown at this date, that may impact on the Company’s future performance, and which may differ considerably.

In addition to the risk factors, the main uncertainties weighing on 2013 concern in particular:
- The global economic environment
- The resilience of energy infrastructure markets in emerging countries
- The growth of renewable energy and the oil & gas markets, as well as clients’ investment programs in these segments
- The recovery of cables for industry in certain segments of the transportation industry, such as shipbuilding, automation and the growth of rail in China
- The Group’s ability to improve its profitability and increase its productivity
- The assumption of limited impact in 2013 of the competition investigations commenced in 2009, and in any event consistent with the accounting options adopted
- The Group’s ability to integrate its acquisitions, benefit from its partnerships and complete planned divestments under the best possible conditions
- The risk of client credit, especially in Europe and Egypt, and even more particularly in Greece where credit risk is no longer insurable
- The business risk in the Middle East and in North Africa.


1. To neutralize the effect of variations in the purchase price of non-ferrous metals and thus measure the underlying sales trend, Nexans also calculates its sales using a constant price for copper and aluminum.
2. A management indicator used by the Group to measure its operating performance. The operating margin rate is expressed as a percentage of the sales at constant non-ferrous metal prices.
3. Proposed dividend that will be submitted to the 2013 General Shareholders’ Meeting for approval.
4. 2011 sales on the basis of comparable data correspond to constant non-ferrous metal sales, recalculated after adjustments for comparable scope and exchange rates. The exchange effect on sales at constant non-ferrous metal prices amounts to 135 million euros, while the comparable scope effect amounts to 157 million euros.
5. After taking into account the positive 5 million euro effect in 2011 from the application of the revised IAS 19 accounting standard. See also the appendix to the consolidated financial statements, note 3.
6. After taking into account the negative 5 million euro effect in 2011 from the application of the revised IAS 19 accounting standard. See also the appendix to the consolidated financial statements, note 3


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 business sector
6. Information by major geographical area
7. Information by major customer

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About Nexans

With energy at the basis of its development, Nexans, worldwide expert in the cable industry, offers an extensive range of cables and cabling solutions. The Group is a global player in the energy transmission and distribution, industry and building markets. Nexans addresses a wide series of market segments: from energy and telecom networks to energy resources (wind turbines, photovoltaic, oil and gas, and mining) to transportation (shipbuilding, aerospace, automotive and automation, and railways). Nexans is a responsible industrial company that regards sustainable development as integral to its global and operational strategy. Continuous innovation in products, solutions and services, employee development and commitment, customer orientation and the introduction of safe industrial processes with limited environmental impact are among the key initiatives that place Nexans at the core of a sustainable future. With an industrial presence in 40 countries and commercial activities worldwide, Nexans employs 25,000 people and had sales in 2012 of nearly 7.2 billion euros. Nexans is listed on NYSE Euronext Paris, compartment A.