(News Bulletin 247) – The world’s second cable company has just won a historic order of 1.7 billion euros from TenneT, the operator of the Dutch electricity network. The market appreciates.

Now fully focused on the electrification markets, Nexans considers itself in a good position to seize the full potential of the energy transition. And today’s announcement reinforces the strategic shift made by the world’s second largest cable company. Nexans has just won a “historic” framework agreement for an initial amount of 1.7 billion from the Dutch electricity network operator TenneT.

On the Paris Stock Exchange, the announcement of this mega-contract reinforces the relevance of Nexans’ strategic transformation on the market. The title rose by more than 3.8% around 11:00 a.m., and posted one of the strongest increases in the broader SBF 120 index.

This contract is for high voltage direct current (HVDC) turnkey projects for offshore wind farms. It was signed as part of a “large-scale” tender launched in June 2022 for an estimated order amount of up to 30 billion euros. It concerns the connection of 40 gigawatts of new wind power capacity in the German and Dutch North Sea by 2030.

Nexans will thus be responsible for three projects to connect future offshore wind farms BalWin 3, LanWin 4 and LanWin 2 to the mainland in the German North Sea. They will be operational between 2029 and 2031 and will aim to “accelerate Germany’s energy transition and strengthen energy security in Europe”.

2,160 kilometers of cables

The group specifies that “significant services” in subcontracting will be added to this framework agreement “after the signing of specific orders for each project”. Under this contract, Nexans will provide a turnkey service and will notably include civil engineering works. A total of 2,160 kilometers of submarine and land cables will be installed by Nexans.

The projects awarded by TenneT are the first in which Nexans will deploy its groundbreaking 525 kilovolt offshore cable technology, specifically designed to support the energy transition. Nexans’ submarine cables will transport a total of 6 gigawatts of energy from the North Sea to Germany.

“Following the success of the DolWin 6 project and the awarding of the BorWin 6 project in 2022, the framework agreement continues the long-term partnership between Nexans and TenneT, helping to accelerate Germany’s energy transition,” explains Nexans.

Refocusing on electrification with “Winds of Change”

Nexans is multiplying initiatives to establish itself as a key player in electrification. In 2021, the cable manufacturer presented a new strategic plan called “Winds of Change” which should lead it to become a “pure player” in electrification by extending the scope of its activities in this area, which will represent between 5, 5 billion and 6.5 billion euros in revenue in 2024.

To carry out this transformation, Nexans will rotate assets through disposals and acquisitions. The group is gradually shedding its cable activities related to telephony and data. Nexans recently indicated that it had entered into exclusive negotiations with a private equity fund based in Belgium, Syntagma Capital, with a view to the sale of its Telecom Systems activity, which generated approximately 180 million euros in turnover. in 2022.

This plan should enable the group to generate an EBITDA margin (gross operating surplus) of between 10% and 12% in 2024, compared to 8.9% in 2022. And for 2023, the company declares that it is confident in its ability to achieve its financial goals “through the potential of electrification and its proven ability to execute, even in times of uncertainty”.