Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on NEXANS SA. We currently have 7 research reports from 1 professional analysts.
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A mixed Q3, but recovery story on track
04 Nov 16
Nexans reported its Q3 16 sales figures: Q3 16 revenues reached €1,071m at constant metal prices, representing an organic decrease of 3.3% yoy. For the first 9M16, revenues were down 0.9% on an organic basis. After a good start to the year, general demand in Europe showed signs of weakening for both cables for the building sector and cables for energy operators. The slowdown observed in Europe during Q3 16 leads to an expectation of rather flat organic sales in 2016. The company remains focused on implementing the strategic initiatives currently under way, and is confident it will significantly improve the operating margin for both 2016 and 2017.
Transformation story is well on track
21 Sep 16
In a call with the company, we received an overview of both the short-and long-term issues which comforted us in our investment case and positive recommendation. The short-term catalyst (12-18 months) definitely and unsurprisingly relies on the strategic plan aimed at deleveraging the company, and restoring margins and ROCE by the end of 2017e. The plan has already begun to bear fruit as seen in H1 16, while 50% remains yet to be accomplished. However, the strong execution so far confers visibility on the targets in our view. The second leg looks mainly cyclical, as the company’s business relies highly on cyclical businesses such as construction, energy and automotive, essentially in Europe. The improvement in these markets is however mainly macro-driven and subject to volatility. The third leg, probably the main and more structural catalyst, relies on growth potential coupled with margin expansion based on the most value-added businesses, especially HV submarine transmission used for interconnections, with strong traction coming from renewables, a trend which looks sustainable in the long run and that will help to achieve the transformation towards a more growth-oriented story.
Strong execution in a challenging environment
29 Jul 16
Nexans reported H1 16 results. Main facts: Revenues came in at €2,951m in H1 16, a 9.8% reported decrease but corresponding to 0.2% organic volume growth. The operating margin reached €135m, corresponding to a 5.9% of sales (versus 4.0% last year), above market expectations. The company is back to net profitability at €30m versus a €58m loss last year. Net debt stood at €373m, down 30% over the last 12 months. The company gave no guidance for FY16 but remains confident in its strategic initiatives to continue to deliver margin improvements.
A slow start to the year as expected
03 May 16
Main facts Organic sales were down by 1.5% to €1,433m (versus €1,601m for Q1 15) but corresponding to 2.4% organic growth compared with Q4 15. •Robust growth in Q1 16 for Automotive harnesses and LAN cables & systems, offsetting the continued deterioration in the oil and mining sectors. •Sales for the submarine high-voltage business were down 14% as expected, due to the effect of project timings. •Start of a recovery in sales of medium- and low-voltage distribution cables to European energy operators (Distribution & Operators division +4.6% yoy organic growth in Q1 16). Management also reported “satisfactory progress for all of the group’s strategic initiatives”.
The recovery is well on track
19 Feb 16
FY15 revenue reached €4.6bn, representing a 1.7% organic decrease mainly reflecting the 15% decrease in North America due to lower investments in Oil&Gas and Mining (c.10% of revenues). The adjusted operating margin was €195m, up 32% yoy and corresponding to a 4.2% margin vs 3.2% last year, slightly above our expectations. The increase in margin was mainly led by Distribution & Installers despite a -2.7% organic change, thanks to prior restructuring actions and sales optimisation. Transmission had the best spot with 2.9% organic growth yoy and also contributed to the margin increase. The Industry BU was about flat in 2015 (-0.4% yoy) but with increased margins as well (4.6% of sales versus 4.1%). However, one-off costs including €129m impairment charges coupled with a €100m restructuring cost led to a net loss of €194m, which was higher than expected. Net debt was down to €201m from €460m due to strong cash flow generation mainly led by lower working capital and despite a cash outflow of €104m for restructuring costs. The company aims to accelerate its transformation in 2016, with an improvement in the return on capital employed, confirmation of the WC reduction and cash flow generation, the management remains confident on the 2017 strategic plan.
Growth still missing: priority to restructuring actions
16 Oct 15
Nexans announced Q3 15 revenues of €1.52bn, at current metal prices (versus €1,574m in Q3 14), down 0.3% yoy on an organic basis. For the F9M 2015, the organic sales decrease came to 0.6%. The following trends by segments were reported: •Sustained robust growth in Q3 for automotive harnesses, LAN cables and systems, and submarine high-voltage projects (excluding umbilicals). •Slight 1.3% decrease in Europe, reflecting lower business volumes in the building market, whereas sales to energy operators and to industry markets stabilised during the period. •Ongoing positive momentum for the Middle East, Russia and Africa area, upturn in South America and stable sales in China. •Continued deterioration in the Oil & Gas and Mining sectors, which weighed on sales in North America and Australia and led to a slowdown in umbilicals projects. Management stated that strategic initiatives, pursued as planned, will continue to have a positive impact on profitability in H2 15.
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
N+1 Singer - Small-cap quantitative research - Momentum screen refresh + 10 focus stocks
12 Jan 17
We have refreshed our momentum style screen for the first time since inception on 26 July 2016. As before, the screen selects the 25 stocks exhibiting the most extreme momentum characteristics, according to our measurement method. From these we have selected 10 to focus on. Since inception the screen has underperformed both the main small-cap and micro-cap indices against a background of generally rising momentum. We have noted a subset of the basket, where decelerating momentum at the time of measurement appears correlated with significant share price falls since selection. We shall monitor this factor with the new screen, albeit there are only two such stocks showing this pattern, namely Lamprell (not rated) and Gear4music (not rated).
N+1 Singer - Morning Song 12-01-2017
12 Jan 17
As anticipated, the second half has again been stronger than H1 and results will be broadly in line with expectations. In line with this, the order book has continued to grow and is at record levels. This confirms that significant progress has been made in the Group’s shift towards its Technology Products division which, as targeted, contributed c.60% of group revenue in FY16. The small acquisition of Cable Power also gives a complementary boost to the product range. It is also worth noting the significant reduction in net debt, £1.0m ahead of our forecast. We remain supportive of the Group’s strategy and continue to see a bright future as this transition towards a design led technology solutions business continues. We look forward to more detail in March at the final results.
N+1 Singer - Best Ideas 2017 - Top picks
04 Jan 17
Today we publish our Best Ideas for 2017 - 12 stocks that we believe have excellent prospects in the current year together with a detailed discussion of what we see as the key sector and market themes for 2017. Our top picks are Cineworld, Elementis, Herald Investment Trust, Hill & Smith, IQE, MySale, Redde, ReNeuron, RhythmOne, SDL, Servelec and Severfield.