France: Nexans Reports Organic Growth of 2.3 Pct in Q3 2012

Nexans today announced 2012 third-quarter sales of 1,819 million euros (at current non-ferrous metal prices), or 1,249 million euros at constant non-ferrous metal prices* , which corresponds to an organic increase of 2.3%**.

For the first nine months of the year, the organic growth in sales was 0.9%, compared with an increase of 0.2% at the end of the first half. This trend reflects the marked recovery in Transmission business sales and steady activity in all other business segments.

Transmission business sales rose by almost 16% in the quarter, reflecting the initial progress made towards gradually stabilizing the production of underwater cables, even if further effort needs to be made in many areas, in accordance with the progress plan previously presented. Underground high-voltage cable business also rose due to a high level of activity in the Gulf States in the quarter, on a market that remains highly competitive. However the Group was still unable to resume its installation business in Libya in the third quarter.

For Power Distribution and Telecom operator (Utilities & Operators), sales contracted by almost 4% in the quarter, mainly due to slower activity in the Middle East (Egypt), South America (Brazil) and Australia, partially offset by the growth of this business in Europe and North America.

The organic growth for Transmission Distribution & Operators came to 2.5% in the third quarter resulting in an overall contraction of 1.9% for the first nine months of 2012. It should see a marked improvement in its profitability in the second half.

For Industry cable business, the Group recorded 3.2% growth for the quarter and 3.1% for the first nine months of 2012. Nonetheless, in Europe, the Group noted slower growth in the area of automotive harnesses combined with a contraction in special cable sales for robots and capital goods in general. On the other hand, the aeronautical industry continued to grow. In the other areas, the Oil & Gas sector saw ongoing expansion, in particular thanks to Nexans AmerCable. In China, demand remains sluggish in the shipbuilding and rail industries.

As the Group expected, the Distributors and Installers business posted very slight growth of 0.1% in the third quarter, bringing the total to 3.3% for the nine first months. Demand is slowing sharply in Europe, stabilizing at a high level in Asia-Pacific and continuing to grow in the Middle East and in North and South America.

Given the market forecast for the fourth quarter, the Group is expecting stable sales figures for the year as a whole. It confirms the increase in the operating margin in the second half of the year, although not as strongly as foreseen in July.

Net debt totaled 824 million euros at the end of September 2012, which is 146 million euros more than at the end of June 2012. This change mainly reflects the finalization of the acquisition of the controlling stake in the Shandong Yanggu Cables energy cable business in early September for 130 million euros (Nexans share). The Group confirms its target to reduce net debt to approximately 700 million euros by the end of December 2012.

[mappress]

Press Release, October 22, 2012