Nexans Unveils Visionary Ambitions for 2028
Nexans is embarking on an exciting journey as it reveals its strategic and financial ambitions for the next four years. During a recent Capital Markets Day, the company showcased its plans to enhance electrification efforts, driven by technological innovation and sustainable practices.
Strategic Directions for Electrification
At the forefront of Nexans' mission is the commitment to advance electrification strategies. CEO Christopher Guérin emphasized the company’s drive to capitalize on emerging opportunities, with a strong focus on innovation and artificial intelligence as pivotal elements in the new electrification strategy.
Amplifying Growth through New Technologies
Nexans is poised to enter what it describes as the third chapter of growth, aiming to significantly augment its presence in the electrification sector. This strategy includes leveraging new technological solutions and exploring untapped market segments, all while incorporating artificial intelligence to optimize operations and efficiency.
Market Position and Operational Strength
The company is strategically positioned in three growing markets, set to expand at twice the speed of the global GDP. By emphasizing early investments in advanced manufacturing and an integrated supply chain, encompassing everything from resource access to robust production capabilities, Nexans is laying the groundwork for sustainable progress. The introduction of end-to-end solutions also emphasizes a holistic approach, combining innovative cable technologies with advanced monitoring tools and software.
Financial Ambitions for 2025 to 2028
When it comes to financial ambitions, Nexans is targeting an organic growth rate of 3-5% CAGR within its existing electrification portfolio. The company anticipates generating an additional adjusted EBITDA of over €350 million by 2028. Financial goals include:
Clear Financial Targets
- Adjusted EBITDA projected at €1,150 million, with a flexible range of plus or minus €75 million, to reflect continuous improvements and portfolio adjustments.
- Return on Capital Employed exceeding 20%, driven by enhanced profitability and disciplined investment strategies.
- Capital Expenditures around €1.2 billion from 2025 to 2028, channeled toward the PWR-Grid and PWR-Connect segments.
- Cumulative free cash flow anticipated to reach approximately €1.4 billion, showcasing strong financial health and a conversion ratio above 45% by 2028.
Forward-Looking Capital Allocation
Nexans' robust capital allocation strategy will prioritize disciplined acquisitions to strengthen its electrification portfolio while enhancing shareholder returns through a progressive dividend policy. The commitment to maintaining a net debt/adjusted EBITDA ratio of less than 1.0x underscores the company’s focus on fiscal responsibility.
Commitment to Sustainability Goals
In alignment with its strategic vision, Nexans is setting ambitious non-financial goals. These include a target to reduce greenhouse emissions by 42% on scopes 1 and 2, and by 29% on scope 3 compared to the baseline of 2019. The company also aims to increase the recycled copper content in its products from 5% to 25% by 2028, reinforcing its dedication to sustainable practices.
Nexans' Established Legacy and Future Vision
With a rich history rooted in the electrification of our planet, Nexans continues to innovate and inspire. The company, employing approximately 28,500 individuals across 41 countries, generated revenues of €6.5 billion. It remains a leader in designing and manufacturing cable systems that contribute to safer, more sustainable energy solutions.
Global Leadership in Climate Action
Nexans has committed to achieving net-zero emissions by 2050 and has been recognized on the CDP Climate Change A List for its leadership in climate initiatives. The creation of a Foundation to support sustainable projects delivers energy access to disadvantaged communities, exemplifying Nexans' mission to electrify the future responsibly.
Frequently Asked Questions
What are Nexans' primary goals for 2028?
Nexans aims to enhance its position in electrification, targeting significant financial growth and sustainability improvements.
How does Nexans plan to utilize technology?
The company plans to integrate artificial intelligence and innovative solutions as part of its electrification strategy to boost performance.
What is Nexans' growth forecast?
Nexans anticipates an organic growth rate of 3-5% CAGR within its electrification sector, driving efficiency and profitability.
What goals are set for sustainability?
Nexans aims to reduce emissions by 42% across various scopes and increase the use of recycled copper in its products by 2028.
How does Nexans support shareholders?
The company maintains a progressive dividend policy with a focus on shareholder returns while managing a strong balance sheet.
