Nexans S.A.

Welcome to the 2025 full year results. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the speakers Julian Huber, CEO, and Vincent Piquet, CFO. Please go ahead.

Thank you, so good morning everyone and thank you for joining us today for Nexon's full year 2025 result call. This is Julien speaking. So let's start as usual in slide 2, a short disclaimer noting that this presentation contains forward-looking statements subject to the usual risks and uncertainties. Moving to slide 3, so before diving into the presentation, I would like to officially welcome I'll introduce Vincent Piquet, who, as you know, recently joined Nexons, our CFO. Nexons brings a wealth of experience from the automotive and industrial sectors and was previously CFO of Ampère at Renault Group. So I am very pleased and we are all very pleased to have him on board. He's fully already engaged with the teams and deeply involved in the preparation of his result and our outlook. You will, of course, have a chance to hear from him in a moment. So before we move into the result, just a brief technical clarification. So in compliance with IFRS 5, the industry and solution businesses are now classified as discontinued operations in the 2025 consolidated financial statements. This is reflected both in 2025 and in the comparative 2024 figures. Let me now walk you through the key highlights of our 2025 performance. Let's move to the results. 2025 was a pivotal year for Nexense, marked with an excellent financial performance. We have reached a major step in our portfolio rotation, fully refocusing the group on electrification, and we delivered a strong set of results across all key metrics. The group standard cells, if I start by this, reached 6.1 billion euros with an organic growth of plus 8.3% year on year, well above our mid-term guidelines on demonstrating strong momentum across all our electrification businesses. The adjusted EBITDA amounted to 728 million euros, representing an adjusted EBITDA margin of 11.9% of standard cells. Excluding other activities which mainly consist of metallurgy, our electrification organic growth and EBITDA margin were even stronger with 11.6% organic growth and a 13.3% adjusted EBITDA margin. The cash generation was also very solid in 2025 with a cash conversion of a ratio of 47% underlying the quality of earnings and strong cash discipline across the board. From a capital efficiency standpoint, Roche reached 21.3%, confirming value creation power of our business model. And finally, we ended the year with a sound balance sheet with a leverage ratio of 0.36 times. Vincent will come back on that later on. And at the same time, we continue our M&A activities with two major acquisitions. The one in Canada, Electrocable, that we concluded in December last year, and the one in Spain, RCT, that we also concluded in June mid-year 2025. Moving to page 7. So this slide illustrates the consistency of Nexon's performance over time. The adjusted EBITDA has increased steadily. reaching €728 million in 2025 with a margin of 11%, as I just explained, compared to 10.3% in 2024. This result illustrates the group's strategic focus on operational excellence, selectivity and value growth driver. The free cash flow reached €344 million, with a cash conversion ratio of 47%, up significantly compared to previous years, and higher compared to our mid-term guidelines. A strong performance that illustrates the cash generative nature of Nexon's business model, as well as the strong cash discipline across all business units, and a working capital-favorable evolution. also continued to improve, reaching 21.3% in 2025 compared to an 18% in 2024, and reflecting disciplined capital allocation and a strong operational execution. In a consistent manner over the years, Nexon's transformation is delivering sustainable growth, improving profitability and strong cash generation year after year. Now moving to page 8. So as a reminder, during our KTL market day in November 2024, we clearly stated our ambitions to become a global electric chain pro player, fully focused on our three core businesses, transmission, grid and connect. In 2025, This year marked the final step of our portfolio rotations, and as announced, we have entered into exclusive negotiations for the disposal of the last part of non-electrification, which is auto-electric or automotive wire harnesses activity. This transaction is expected to close mid-year 2026. With this transaction, Nexon's complete its strategic refocus and now is fully dedicated to electrification with a simpler, more focus on more resilient business profile. Moving to page 9, so alongside with the divestment we just explained and you've seen in 2025, we continue to pursue targeted acquisition to strengthen electrification footprint. In 2025, we complete two acquisitions representing around 260 million euros of cumulative full year sales. The first acquisition, ElectroCable in Canada, reinforced our positioning in low-voltage cable on a high-heighted solution. It brings attractive growth, a robust profitability profile, and supported by a strong industrial footprint in Canada. This acquisition fits very well with our Connect strategy and offers clear opportunities to deploy our operational discipline. The second acquisition, RCT in Spain, in Saragossa area, strengthens our expertise in flexible fire safety solutions, especially in data centers and critical buildings, to fast-growing and high value-added segments that we are targeting. The newly industrial capacity that was announced at the time of the acquisition is now up and running and delivering portfolio, and we are very proud and satisfied with the new team that has effectively put in place this new machine and capacity increase. What is critical in both cases is not only the asset acquired, but how value is created after closing. In line with our approach, synergies are being deployed through the rollout of our Proprietary Shift program, ensuring smooth integration, execution discipline and value creation. Taken together, this acquisition illustrates how NextSense uses M&A to reinforce its electrification pure player positioning, expand selectivity in key geographies, and replicate its value creation model in a disciplined and repeatable way. Now moving to slide 10 regarding the sustainability. So let me focus on sustainability which is fully embedded in Nexon's operating model and group strategy. In 2025, Especially on our decarbonisation trajectory, Nexons pursued the same trend and exceeded its mid-term target for Scope 1 and 2 with minus 49% of CO2 emissions, mainly driven by energy efficiency solutions implemented on-site on significant levels of renewable energy usage. In the meantime, the current performance on Scope 3 was reached following low-carbon product innovations and circular material integration through our initiative like Cable Loop that was launched in France and Spain with our Platinum customers enabled us to reach 880 tons of cable collection during the year. We will explain in the deep dive session how we will expand these solutions. Through these initiatives, Combined with the METARJU project in Lens that will be commissioned in 2027, or another example of the partnership with RTE, the French TSO, where we have launched the first European closed-loop recycling system for aluminium, we are not only reducing our environmental footprint, but we are also reinforcing supply security and reinforcing a structural competitive advantage on the energy sector. Let's move to slide 12 and go now deeper in the business review regarding the year 2025 performance. So first, let me first focus on the fourth quarter, which was particularly strong. In Q4 2025, the group delivered an organic growth of 11.8%, or even 18%, excluding other activities, reflecting an exceptional high level of activity, notably in transmission and in power connect. With Q4, performance was well above our normalized run rate, supported by a combination of strong demand, high project execution intensity and a favorable phasing effect. Of course, we anticipate a normalization of the first quarter 2026, reflecting a more balanced phasing of projects. Beyond Q4 Dynamics, the strong finish of the year further supports the structural improvement of profitability, with the group adjusted EBITDA margin reaching 11.9% on 13.3%, excluding other activities, which was mostly driven by power transmission and power grid, and supported by our selective approach and quality of execution. Overall, 2025 clearly demonstrates an extensibility to translate long-term electrification trends into profitable growth. Let's now move business by business, and I will start by power transmission, which delivered an exceptional level of learning growth in 2025. Indeed, organic growth reached plus 29.8, so almost 30% for the full year, accelerating at the 40% rate in the fourth quarter of 2025, reflecting a very high level of activity and a strong execution. Bear in mind that the last two years, we have registered an unusual high level of organic growth, thanks to capacity increase, and we should go now back to a normalized level in 2026. The standard sales of transmission amounted to 1.6 compared to 1.2 billion euros in 2024. The adjusted EBITDA reached 203 million euros with an adjusted EBITDA margin of 12.3, up from 11% compared to the year before. This margin improvement was mainly driven by quality of execution on projects and increased efficiency following a full year of operations at the expanded plant in Halden in Norway. Finally, the adjusted backlog stood at 7.7 billion euros at year end, including 1.2 billion euros of the GSI project, still in phase of rescheduling with our customer. This adjusted backlog provides us a good visibility until 2028. Now moving to the power grid parts. Our grid business... delivered a growth of 5.5% in 2025, in line with our mid-term guidelines, and confirming a favorable momentum. In the fourth quarter, organic growth was plus 3.5%, reflecting seasonal softness, particularly in winter-sensitive activities and project phasing. Standard sales amounted to 1.3 billion euros compared to the 1.2 billion in 2024. The adjusted EBITDA increased to 217 million euros, which is up by 19% year-on-year, with an adjusted EBITDA margin of 16.4%, which is an improvement of 226 points. This strong performance reflects our focus on operational excellence with the continued strength of our accessories activities, increased selectivity in high-demand environments, as well as some one-off effects linked to some European renewable projects that we had in the last part of the year. This strong performance reflects our focus on operation excellence, the continued strength of our access to those activities and increased selectivity in a high demand inventory, as well as some one-off effects linked to some European. Importantly, the business, Importantly, the business benefits with strong visibility supported by multiple long-term frame agreements with recent contracts such as Enedis, providing increased visibility going forward. And if you remember, we have communicated the wins in the contract with Enedis for the coming seven years. Now let's move to slide 15, the finally PowerConnect business, which grew organically by 3.6% year-on-year. in line with our mid-term guidelines. In the fourth quarter, organic growth accelerated by a plus 10.9% driven by delivery of large infrastructure and data center-related projects. Standard sales reached 2.3 billion euros, which is compared to 2 billion in 2024. The adjusted EBITDA amounted to 289 million euros compared to 271 in 2024 and it stood at 12.3% compared to 13.1 last year. Margin performance reflects strong profitability in advance offer on platinum customers while the more conventional part of the business remain under pressure particularly in Asia Pacific and in Oceania. Finally, The integration of Latvian Acta KV in Italy and the roll-out of the shift program continue as planned with a strong focus on operational and industrial excellence. Again, let me remind you that PowerConnect is a contrasted segment where we have some very strong performers both in top line and margin, and our objective is to make all business units catch up with the best in class. We will now move to a key financial on Vincent, Welcome on board and over to you now for the financial part. Thank you Julien and good morning everyone.

Before going into the details, let me take just a brief moment to say that I'm honored to be here today. I want to thank Julien and the board for their trust. I've now been working closely with the teams for a few weeks and I'm very excited about the fundamentals of the business and the road ahead. With that, let's start with the 2025 revenue bridge. As you can see, group standard sales increased by 10.1% year-on-year, reaching nearly 6.1 billion. Growth was primarily organic, with a strong 8.3% increase, reflecting a solid underlying momentum across the group. Scope effects contributed a further 5.1%, illustrating the growing contribution from our recent acquisitions over the year, mainly RCT and RTC full-year contributions. These positive drivers were partly offset by an unfavorable foreign exchange impact of 3.3%, mainly related to the Turkish Lira and the Canadian dollar. On the profitability slide, adjusted EBITDA increased by 27.3% year-on-year, reaching $728 million in 2025, with the margin improving from 10.3% to 11.9% of standard sales. This evolution reflects the contribution of our electrification businesses, supported by growth and margin improvement. First transmission delivered both growth and higher profitability, making it a strong contributor to the group's EBDA improvement last year. Grid also recorded a positive year with strong improvement in profitability year-on-year. And in Connect, performance was more contrasted across regions and business units, as described by Julien. Asia Pacific and the Nordics were slower, and the process of improving LTC's performance is ongoing, and we also have the impact of a full year versus a few months in 2024. That said, we are confident in our ability to bring LTC up to NextSense's standards. Overall, within Connect, our structural drivers performed well, while we remain focused on enhancing the profitability of the rest of the portfolio. The Connect segment includes 26 million off-scope effect in the full year of LTC versus only 7 months in 2024, and RCT with a 7-month contribution. In other activities, the variance is mostly driven by negative one-offs recorded in 2024. As expected, metallurgy was impacted by the US tariffs effect in H2 after a strong H1 and accounts for a negative 6 million of impact on a full year basis. Overall, this bridge illustrates strong operational leverage in 2025, with EBITDA growth clearly outpacing sales growth and translating into a meaningful margin expansion. Moving on to net income. As we've just seen, the starting point of the net income progression in 2025 is a very strong increase in adjusted EBITDA from 571 million in 2024 to 728 million in 2025, an increase of 27.3%, well above the 10.1% of growth of our top line and demonstrating our strong operational leverage. This EBDA progression is also the main driver of the increase in net income from continuing operations, which reached 219 million, up 31.1% compared to last year. Beyond EBDA, a few additional elements are worth highlighting. First, financial expenses decreased significantly, mainly linked to hedging effects, in particular the evolution of the forward spread on the Norwegian kroner. At the same time, depreciation and amortization increased to 253 million in 2025 compared to 175 million in 2024, mainly reflecting investments in our Norway transmission plant in Halden. Net income from discontinued operations increased to 138 million, reflecting gains on disposals linked to Hammer Cable and Link CO, as well as the operating performance of industry and solutions partially offset by an impairment on Auto Electric as we moved it to discontinued operations. Overall, group net income reached 358 million in 2025, up 26.6% year-on-year, illustrating the strong earnings conversion of the group's operational performance. Moving now to cash flow and net debt. 2025 was another year of solid free cash flow generation which reached $344 million, compared to a restated amount of $177 million in 2024, translating into a 47% cash conversion rate above our midterm guidelines. This level reflects first a strong performance of adjusted EBITDA, but also a strict cash discipline, as shown by working capital evolution, and also helped by above-average down payments in power transmission. CapEx amounted to €383 million, mainly driven by power transmission, as we continue to execute on the capacity expansions decided in prior years in both Norway and Charleroi in Belgium. Dividend and others includes the cash impact of our employee share buyback program on top of the dividend payment. And the M&A column mainly reflects the contribution from the closed acquisitions of Electro Cables and RCT. It does not include the impact of Auto Electric as the closing of this transaction is expected mid-2026. Change in discontinued activities relates to the divestments of Linkgeo and Hammer Cable, as well as the reclassification of our automotive activity under discontinued operations in compliance with IFRS 5 standards. As a result of these transactions, combined with strong cash generation, net debt decreased significantly from 681 million at the end of 2024 to 266 million at the end of 2025. As you can see, overall the company is in great financial shape. Let me now spend a moment on our financial structure. At the end of 2025, NexSense benefits from a very solid liquidity position. We have significant cash on hand, complemented by committed and largely undrawn credit facilities. This gives the group ample headroom to operate comfortably. Our debt structure is well diversified and fully fixed rate, which protects us from interest rates volatility and provides good visibility on financing costs. And importantly, we have no material debt maturity before 2027. From a leverage perspective, Nexance remains very conservatively positioned with a low financial leverage ratio of 0.36 times. This trend is also reflected in our credit profile with an S&P BB Plus rating with stable outlook. It confirms that the group has the financial firepower to pursue targeted M&A, growth capex, and continue to deliver shareholder returns. In fact, shareholder return is a core component of our value creation model. Over the past 3 years, Nexance has delivered a total shareholder return of 59% and 250% over the past 6 years. This performance reflects the consistency of our execution over time. As shown here, the dividend per share has increased steadily over the past years, reaching a proposed 2.9 euros per share for 2025, an increase of 11.5% compared to 2024 and another historical record. This dividend growth is anchored in a group's improved profitability, strong cash generation and disciplined capital allocation. Our approach remains very clear. We aim to reward shareholders while preserving flexibility to invest in our growth and maintain a sound balance sheet. Looking ahead, this discipline remains a key area of focus. Our dividend policy is fully aligned with our financial trajectory, with a target payout ratio of at least 30% by 2028, while remaining consistent with our leverage and investment priorities. And with that, I now hand over back to Julien.