Q1 2020 FINANCIAL INFORMATION
| Stable Group sales in unprecedented crisis
| Transformation program reinforced and implemented Group-wide
| Paving the way for a stronger Nexans
Christopher Guérin, CEO | Jean-Christophe Juillard, CFO
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| Nexans Q1 2020 Results
Safe Harbor
NB: Any discrepancies are due to rounding.
This presentation 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 visit the Group's website where they can view and download the presentation of the 2019 annual results to analysts as well as the 2019 financial statements and Nexans Universal Registration Document, which includes a description of the Group's risk factors - particularly those related to the investigations into anti-competitive behavior launched in 2009.
In addition to the risks inherent in executing the New Nexans Transformation Plan, the uncertainties:
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The uncertain economic and political environments in the United States and Europe, with the risk of growth being slowed by possible major changes in US trade policy on one side of the Atlantic and the potential consequences of Brexit on the other.
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The impact of protectionist trade policies (such as those implemented by the current US government), as well as growing pressure to increase local content requirements.
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Geopolitical instability, particularly in certain countries and geographic regions such as Qatar, Libya, Lebanon and the Persian/Arabian Gulf as well as in Hong Kong.
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The impact that the coronavirus pandemic and the adoption by State authorities in many countries around the world of national restrictive measures (including prolonged measures to control the pandemic) could have on Group's operations, its operating profit and financial position.
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Political and economic uncertainty in Brazil, Chile and Turkey, which is affecting the building market and major infrastructure projects as well as creating exchange rate volatility and an increased risk of customer default.
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A marked drop in non-ferrous metal prices resulting in the impairment of Core Exposure, not having an impact on cash or operating margin, but impacting net income.
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The impact of growing inflationary pressure, particularly on commodities prices (resins, steel, etc.) and labor costs, which could affect competitiveness depending on the extent to which they can be passed on to customers in selling prices.
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The sustainability of high growth rates and/or market penetration in segments related to datacenters, to the development of renewable energy (wind and solar farms, interconnectors, etc.) and to transport.
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The rapidity and extent of market take up of LAN cables and systems in the USA and the Group's capacity to seize opportunities relating to the very fast development of data centers.
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The risk that the sustained growth expected on the North American automotive markets and on the global electric vehicle market does not materialize.
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Fluctuating oil and gas prices, which are leading Oil & Gas sector customers to revise their exploration and production capex programs at short notice. The considerable uncertainty about the implementation of these customers' capex programs also creates uncertainty about the confirmation of cable orders booked by the Oil & Gas segment.
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The risk of the award or entry into force of submarine and land cables contracts being delayed or advanced, which could interfere with schedules or give rise to low or exceptionally high capacity utilization rates in a given year.
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Inherent risks related to (i) carrying out major turnkey projects for submarine high-voltage cables, which will be exacerbated in the coming years as this business becomes increasingly concentrated and centered on a small number of large-scale projects (Nordlink, NSL, East Anglia One, Hornsea 2 and DolWin6, which will be our first contract to supply and install HVDC extruded insulation cables), (ii) the high capacity utilization rates of the plants involved, and (iii) the projects' geographic location and the political, social and economic environments in the countries concerned (Venezuela, Philippines).
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The inherent risks associated with major capital expenditure projects, particularly the risk of completion delays. These risks notably concern the construction of a new submarine cable laying ship and the extension of the Goose Creek plant in North
America to increase the production of submarine high voltage cables, two projects that will be instrumental in ensuring that we fulfill our 2021 objectives.
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