Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on NEXANS SA. We currently have 8 research reports from 1 professional analysts.
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Strong execution confirmed in 2016, good prospects ahead
10 Feb 17
Nexans reported a strong increase in the 2016 FY results - Sales for 2016 came to €4,431m at constant metal prices, representing a 1.2% organic decrease compared with 2015. - EBIT totalled €242m, up €47m from the €195m recorded in 2015. - Operating margin for 2016 represented 5.5% of sales at constant metal prices versus 4.2% in 2015. - Back to profit with €61m in net income for the year versus a €194m net loss in 2015. - Proposed dividend of €0.5 per share.
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.
Emerging from the clouds
16 Feb 17
Rolls-Royce’s underlying performance in FY16 was ahead of both its own and market expectations. Media focus on the non-cash £4.4bn headline FX loss is missing what looks to be the basis for optimism. As the civil model starts to move from investment in engines for the A350 and A330neo into the aftermarket delivery phase over the remainder of the decade, we think cash flow is likely to improve, particularly if supported by an eventual recovery in Marine.
15 Feb 17
At the current market capitalisation of £29m, we believe the shares are significantly undervalued. We estimate that the highly profitable Maritime business is alone worth at least £40m. With net cash of £9m at end-2016, this implies that the market is currently ascribing a combined negative value of £17m to the rest of the group, which together account for c.54% of group revenues. This is very harsh given the management actions to transform TP Group to a profit-driven Tier 2 specialist services and engineering company are bearing fruits across the divisions. TPG Managed Solutions is expected to more than double its profits in 2017, while TPG Engineering and Design & Technology are on course to deliver sustainable profits from 2019. Even if we ascribe zero value to Engineering, Design & Technology and Managed Solutions, the shares are worth 9.5p a share, a 38% upside from the current share price. BUY.
Taking the bull by the horns
15 Feb 17
Avon Rubber announced this morning that CEO Rob Rennie has left and been replaced with Paul McDonald, formerly managing director of Avon’s Dairy division. This news comes as a surprise and is likely to raise some questions over the CEO and CFO transition, with the CEO only being in post for just over a year. However, the group has appointed an executive already known to many who have followed the business, and as such should be seen as a good appointment with a track record of decisiveness and getting things done.
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.
Share & share alike
14 Feb 17
The rally in the last fortnight, highlighted in the table, reflects a continued flow of positive updates and economic news. The FTSE 250, Small cap and Fledgling indices have reached record highs. We are in the lull ahead of results for those companies with a December year end, a welter of economic data regarding the UK economy, the State of the Union address in the US on 28 February and the UK Budget on Wednesday 8 March. We will learn at that stage the latest forecasts from the Office of Budget Responsibility. As highlighted previously, the reaction to corporate updates will continue to set the tone.