Nexans (NEX) Q3 2024 earnings summary

Executive summary

• Achieved 4.0% organic group sales growth for the first nine months of 2024, led by Electrification segment's 12.1% organic growth and strong Generation & Transmission (G&T) performance.

• G&T sales grew 54.3% year-over-year, with backlog reaching €6.2 billion, up 19% year-on-year, driven by new project awards and capacity ramp-up.

• Significant investments in high-voltage and medium-voltage cable production, copper recycling, and sustainability initiatives support future growth.

• Net-Zero 2050 climate targets approved by the Science Based Targets initiative, with new low-carbon solutions and recycling services launched.

• Non-Electrification and Other Activities declined, reflecting market trends and strategic focus on core segments.

Financial highlights

• Group standard sales reached €5,226 million for 9M 2024, up from €4,921 million in 9M 2023.

• Adjusted EBITDA guidance for 2024 is €750–800 million; normalized free cash flow guidance is €275–375 million.

• G&T segment sales grew 54.3% year-over-year to €899 million, with backlog at €6.2 billion as of September 2024.

• Distribution segment saw 1.6% organic growth for nine months, with strong performance in Europe and Asia Pacific.

• Usage segment posted 0.5% organic growth, with growth in North and South America offsetting declines in Europe.

Outlook and guidance

• Full-year 2024 guidance confirmed: adjusted EBITDA €750–800 million, normalized free cash flow €275–375 million.

• Expect record profitability for 2024, with strong Q4 trends and robust demand outlook driven by electrification megatrends.

• G&T growth for 2024 will be strong but slightly below initial 60% target due to project delays; catch-up possible if Great Sea Interconnector proceeds.

• La Triveneta Cavi acquisition expected to add around €40 million to 2024 EBITDA.

• Headwinds include geopolitical and economic uncertainties, seasonality, and execution of legacy contracts with dilutive margins.