2018 Half Year Results
July 26, 2018
Safe Harbor
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.
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The uncertainty in the economic and political environment in Europe including the possible consequences of Brexit which could lead to lower growth ;
The impact of protectionist trade policies triggered notably by the current US government as well as growing pressures to increase local content requirements ;
Geopolitical instability including embargoes of Qatar and Iran, political instability in Libya and Ivory Coast, as well as persistent tensions in Lebanon, the Persian/Arabian Gulf and the Korean peninsula ;
The continued uncertain political and economic situation in South America, particularly in Brazil, which is affecting the building market and major infrastructure projects in the region as well as creating exchange rate volatility and an increased risk of customer default ;
Abrupt changes in non-ferrous metal costs that can impact short term customers' purchasing patterns;
A significant drop in metal prices leading to core exposure reevaluation and a direct impact on net income, though without impact on cash or operational margin;
The impact of rising inflationary pressures, notably on raw material costs (resins, steel etc.) and labor costs which may impact competitiveness depending on the ability to pass them through into the selling prices to our customers;
The impact of changes in exchange rates on the conversion of the financial statements of the Group's subsidiaries located outside the euro zone.
The sustainability of the high rates of growth and/or Nexans' market penetration in the segments related to renewable energy development (wind and solar farms, interconnections etc.);
The speed and magnitude of recovery in the LAN cabling markets in North America and the Group's ability to take advantage of the strong growth in large data centers;
The risk that the expected sustained growth in the automotive markets in North America and in the electric vehicle market worldwide does not materialize;
The Group's ability to adapt to changes in O&G customers' investments in exploration and production in reaction to oil and gas price fluctuations;
The risk that certain programs designed to improve the Group's competitiveness such as programs of design to cost, fixed cost reductions, R&D and innovation programs, or certain business development plans targeting new markets, experience delays which can result from the speed in technology transfer on obtaining customer qualifications, or which otherwise do not fully meet their objectives;
The risk that the timing of expected contract awards or entering into force of contracts in submarine cables are delayed, or accelerated, which can result in unused capacity, otherwise disrupt planning, or exceptional capacity utilization in any given year;
The inherent risks related to carrying out major turnkey projects for submarine high-voltage cables. Those might be exacerbated in the coming years as this business becomes increasingly concentrated and centered on a small number of large scale projects (Beatrice, Nordlink, NSL, East Anglia One and DolWin6, which will be the first contract to supply and install HVDC extruded insulation cables), leading to a high capacity utilization rates of the plants involved;
The inherent risks associated with major capex 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 add production of submarine high-voltage cables, two projects that will be instrumental to 2022 objectives.
