(News Bulletin 247) – The manufacturer of industrial cables revealed a disappointing growth rate and turnover in the third quarter. Nexans confirms its objectives set in July and will organize an investor day on November 13.

Nexans has been identified by investors as one of the leading stocks to play the energy transition within the cables world. Since the start of the year, the industrial cable manufacturer was up almost 75% as of Tuesday evening’s close thanks to a series of stunning publications.

This flawless course left little room for the slightest disappointment. However, Nexans’ activity stalled in the third quarter.

Activity below expectations

Between July and the end of September, Nexans recorded a turnover down 0.5% to 1.68 billion euros on a standard basis, that is to say at constant copper prices, i.e. occurrence 5000 dollars per tonne, and 1200 dollars per tonne for aluminum (all manufacturers automatically passing on variations in the price of the metal to customers).

This activity is below the expectations of Oddo BHF, which forecast a quarterly turnover of 1.79 billion euros for Nexans and organic growth of 4.3%.

“The gap compared to our expectations mainly comes from non-core activities (non-core business). This quarter is largely impacted by the consolidation of La Triveneta Cavi (Italian company acquired by Nexans in the first half, Editor’s note) which justifies growth of more than 8%”, specifies the design office.

“This quarter is still characterized by an excellent performance of the G&T (Production and Transmission) activity (36.2% organically) but shows less one-off dynamics for ‘distribution and uses’”, notes Oddo BHF.

Another disappointment is the pace of growth recorded by the group from one quarter to the next. In the second quarter, the cable manufacturer achieved organic growth of 9.4%.

As for Vusiongroup on Tuesday and for the same reasons – the good student Nexans is sanctioned on the Paris Stock Exchange after this failure. Its stock fell by 10.3% to 124.50, showing the biggest drop in the SBF 120 index this Wednesday morning.

An investor day on November 13

This failure does not call into question the annual objectives that Nexans had set last July alongside its half-year results.

For the current financial year, Nexans still expects its adjusted gross operating profit (Ebitda) to be between 750 and 800 million euros. Normalized free cash flow is expected between €275 million and €375 million.

On the side of Oddo BHF, the financial intermediary recalls having recently raised its estimates (+2.5/3% for Ebitda 2024 and 2025) to retain the high end of the guidance range (800 million euros) reflecting a increase of 20% over one year with an Ebitda margin of 11.2% (+100 basis points or 1 percentage point).

The group says it is still well positioned to benefit from the dynamism of demand with the generalization of electrification throughout the world. Nexans will organize an investor day on November 13, to detail “the initiatives that will shape the trajectory” of the group “over the coming years”.

This new roadmap will supplement the “Winds of Change” strategic plan unveiled in 2021.