2020 Third Quarter Financial Information
Turning Adversity into Opportunity
| Christopher Guérin, CEO | Jean-Christophe Juillard, CFO
Paris November 5th, 2020
| Nexans Q3 2020 Results
Safe Harbor
NB: Any discrepancies are due to rounding
This press release 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 risk factors described in Section 3.1 of the 2019 Universal Registration Document and the risks inherent in executing the New Nexans Transformation Plan, the uncertainties for the second half of 2020 mainly include:
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The impact of protectionist trade policies globally (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, cities or regions such as Qatar, Libya, Lebanon, Iraq, the Persian/Arabian Gulf, Hong Kong, Ivory Coast and Nigeria;
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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 in particular in the context of a second wave of the pandemic such as in
Europe (including prolonged measures to control the pandemic such as travel bans, curfews and country lockdowns) could have on our Group's business growth, operating profit and financial position;
o
The increase in credit risk in certain countries (like Brazil, Peru, Colombia, Morocco and Turkey) in the context of the coronavirus pandemic;
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The uncertain economic environment in the United States and Europe, with the risk of growth being slowed by potential major changes in US trade policy on the one hand and the possible consequences of Brexit on the other;
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Political, social and economic uncertainty in South America, such as in Brazil, Chile, Venezuela and Bolivia, which is i) affecting the building market as well as major infrastructure projects in the region (such as the Maracaibo project in Venezuela), ii) creating exchange rate volatility and iii) increasing the risks 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 raw material prices (resins, steel) 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 growth rates of the fiber and copper structured cabling (LAN) market and the Group's capacity to seize opportunities relating to the move to higher performing categories in this market;
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The speed of deployment of ftth ( fiber to the home ) solutions in Europe and North West Africa and the Group's capacity to seize opportunities relating to the development of this market;
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The impact of the coronavirus pandemic on the aeronautic industry which has led our customers to revisit their order books for the coming months and years;
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The fact that automotive sales may continue to be adversely affected in the context of the coronavirus pandemic on a global basis and that the progress of electrical propulsion solutions will penetrate markets slower than predicted;
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Fluctuating oil and gas prices, and the downturn in the Oil & Gas sector which have lead Oil & Gas sector customers to revise their exploration and production capex programs. The considerable uncertainty about the implementation of these customers' capex programs may also affect the Group's ability to plan for future means of producing cables and umbilicals for these customers, and for imposing changes to the agreed delivery schedules for contracted projects in the context of the coronavirus pandemic.
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The risk of the award or entry into force of subsea and land cable contracts being delayed or advanced, which could interfere with schedules in a given year;
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Inherent risks related to (i) carrying out major turnkey projects for high-voltage cables, which will be exacerbated in the coming years as this business becomes increasingly concentrated and centered on a small number of
