Nexans Announces 2014 First-Quarter Sales Up 3.8%

Nexans has announced first-quarter 2014 sales of 1,560 million euros at current non-ferrous metal prices (versus 1,668 million euros in the first three months of 2013). At constant non-ferrous metal prices, first-quarter sales came in at 1,107 million euros, representing year-on-year organic growth of 3.8% at constant exchange rates.

Europe reported 2.7% organic growth, with sales for the building sector relatively stable, and growth recorded by industrial cables – powered by the automotive harness, aeronautical and medical segments – more than outweighing the impact of the ongoing morose context for distribution activities (medium- and low-voltage cables).  This solid performance was driven mainly by the transport sector which once again delivered double-digit growth, both for automotive harness cables and for cables for the aerospace and railroad businesses. The shipbuilding sector also advanced, driven by strong sales in Korea.

In the renewable energy industry, sales are weak but expected to improve during the second half of the year, notably driven by the wind power sector in Brazil where the Group signed a contract with Suzlon, one of the world's leading wind turbine manufacturers, to deploy cable solutions for some 150 wind turbine generators.  In other industrial segments, automation cables showed promising developments and sales of cables for the medical industry rose steadily.

Sales of submarine high-voltage cables jumped by over 20%, as a result of ongoing measures to improve production conditions, especially in umbilicals. In addition, the order book remained well stocked while the Group also tendered for a number of large-scale projects.  In view of the healthy order book, the sustained performance of the umbilicals business should continue through 2014.

As expected, sales of land high-voltage cables retreated in the first quarter of 2014, down by 16% due to the timing of project deliveries. In China, Yanggu turned in a strong showing but its sales volumes nevertheless remained limited pending the end of the qualification period for it to begin exporting.  Meanwhile, construction of the Charleston plant in the United States is on schedule.

The outcome of the antitrust investigations launched in 2009 by the European Commission in relation to the submarine and underground high-voltage power cable industry was announced on April 2nd.  In 2011, a 200 million euro provision was set aside in Nexans France's statutory financial statements and the Group's consolidated financial statements, to cover the potential consequences of these investigations. Nexans France has been issued a fine of 70.67 million euros.

Commenting on the Group's first-quarter 2014 performance, Frédéric Vincent, Chairman and CEO, said:  "We have stepped up the pace of our many strategic initiatives under the impetus of a strengthened and focused management team, and this has contributed to the Group's performance over the quarter. The first fruits of these efforts are already visible in a certain number of businesses in terms of competitiveness and turnarounds. The entire Group remains actively committed to carrying through the transformation plan".

Source wireworld