Nexans First-Half Year Results 2008
31 Jul 2008
- Continued increase in organic sales growth of cable businesses*: +7.2%
- Strong improvement in profitability with operating margin of 9.1% at constant non-ferrous metal prices (6.2% at actual non-ferrous metal prices)
Paris, July 24, 2008 - The Nexans Board of Directors chaired by Gérard Hauser, which met on July 23, 2008, has reviewed the Group’s consolidated financial statements for the 2008 first half-year.
- First half-year Sales totaled $NZ7,542 million, compared to $NZ8,047 million at June 30, 2007.
At constant non-ferrous metal prices**, sales reached $NZ5,133 million compared to $NZ5,201 million for the first half of 2007.
The decrease in revenues corresponds to the deliberate reduction of the external sales in the electrical wires business.
Organic growth in the cable businesses *** stood at 7.2%.
- The operating margin for the period was $NZ466 million compared to $NZ396 million for the first half of 2007, an increase of almost 18%. Operating margin as a percentage of sales therefore rose from 7.6% at June 30, 2007 to 9.1% at constant non-ferrous metal prices at June 30, 2008 (from 4.9% to 6.2% at actual non-ferrous metal prices).
- Net income (Group share) for the first half of 2008 was stable at $NZ252 million, due in particular to the lesser effect of the revaluation of the copper “core exposure” and to an increase in the effective rate of tax, the company having now used up most of its tax loss carryforwards which can be absorbed in the near term.
- Net financial debt totaled $NZ969 million at June 30, 2008, down $NZ161 million compared to June 30, 2007. The gearing is 25.4%.
* Cable businesses and associated products (accessories), excluding electrical wires.
** To neutralize the effect of variations in the purchase price of non-ferrous metals and thus measure the underlying sales trend, Nexans also calculates its sales using a constant price for copper and aluminum.
*** 2007 sales based on comparable data correspond to sales at constant metal prices, taking into account the effects of variations in exchange rates and consolidation scope.
A continuation of strong growth based on profitability
Commenting on the 2008 first half-year results, Nexans Chairman and CEO Gérard Hauser said: "In spite of the increased uncertainty in the economic and financial environment, the increase in profits announced today is completely in line with the objectives Nexans has set for 2009. This performance is the result of a strategic plan focused on longer-cycle growth sectors, significant targeted investments and a carefully crafted external growth strategy. These factors, combined with a strict cost monitoring policy, allow us to expect an increase in operating margin for 2008 compared with 2007, based on organic growth in sales of more than 6%.
Finally, the possible sale of our automotive cable harnesses business has been abandoned. Considering the state of the markets, the proposed valuation multiples were not in line with the Group’s or with the business's potential. Taking this into account, as well as the acquisitions of Intercond and Madeco, the Group’s net financial debt at year-end should be between $NZ1,060 and $NZ1,273 million".
Back to articles