Nexans S.A.

Welcome to the Nexen's Q1 2026 Financial Information. 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.

Good morning, everyone, and thank you for joining us today for Nesson's first quarter 2026 financial information call. So, as usual, a short disclaimer, noting that this presentation contains forward-looking statements and subject to the usual risks and uncertainties. So, let me now walk through the highlights of our Q1 2026 performance. So we started 2026 with a solid performance in our electrification core businesses, delivering a robust plus 4.9% organic growth in Q1, fully in line with our roadmap and supported by strong underlying demand. At group level, standard sales reached 1.5 billion euros, corresponding to 0.1% organic growth, as the good performance in electrification was offset by the contraction in our metallurgy activities as expected. following last year's exceptional copper ordering level in the U.S. ahead of tariff implementation. At the same time, we are very pleased to announce a strategic acquisition in the U.S. low-voltage segment, Republic Wire. This is a sizable platform with around 520 million euros of current sales, which will significantly strengthen and diversify our power-connected activities and our overall electricity footprint in the Americas. This acquisition is in line with what I have mentioned a few times over the last six months. M&M's US is one of the key focus areas for Nexon. And just to give you a number, in North America, our sales is moving from 350 million euros in 2025 to no more than a billion euros sales thanks to the acquisition in Electro Canada we've done in last December and today, Republic Wire. Republic Wire transaction is expected to close early third quarter of 2026, subject to, of course, customary regulatory approval. Vincent will provide just after more information about the Republic Wire. Now moving to slide 5, turning now to the performance by segments, you can see all three electrification segments delivered a solid start of the year, driven by early growth of power transmission at the plus 8 Power grid at a plus 5.7% organic growth and PowerConnect at 2.5%, confirming the healthy underlying demand on the disciplined execution of our strategy across the electrification perimeter. The other activities, mainly comprising of metallurgy, have declined by 24% organically. This reflects last year's unusual pattern in copper orders in the U.S., with a strong pull forward ahead of tariffs in H1, followed by a marked correction in H2, combined with our strategy to reduce external copper sales in favor to internal usage. As a result, organic growth in other activities is expected to mechanically turn positive again in the second half of 2026. Let me now go segment by segment, starting with power transmission in slide 6. So in the first quarter of 2026, standard sales reached €342 million, compared to €308 million in Q1 last year, 2025, representing an 11.1% growth, driven by 8.8% bargaining growth and a favorable foreign exchange fixed impact. This marks a return to more normalized growth after two years of exceptionally high performance, fully in line with our expectations. Once again, transmission is about a long cycle of standards and activities, and we should see another cycle of growth in the next couple of years, considering the amount of potential projects to be launched. in the current geopolitical context becomes more and more mandatory, especially in Europe. Our Q1 performance reflects strong execution on our project and continued commercial expansion in smaller-sized projects. At the same time, we are implementing targeted cost actions on demonstrating operational agility. Looking ahead, and as stated, it's important to bear in mind that our Q2 2026 struggling growth will be a single-digit negative territory due to the expected projected effects. The trajectory should recover in positive territory in H2. Turning to the backlog, our adjusted power transmission backlog stood at 7.9 billion euros at March end 2026, compared to 7.7 billion of December, end of December 2025. It's a plus 2.6% increase over the quarter. Our backlog provides strong visibility through 2028, supported by high quality, a robust pipeline of projects, particularly in Europe, driven by energy sovereignty needs, and the upcoming commissioning of our third cable lane vessels, Nexans Electra, expected to be operational by mid-year 2026. Let's now move to slide 7, to power grid. Standard sales in power grid reached €322 million in Q1 2026 compared to €313 million in Q1 2025. That's an increase of 2.9% driven by a solid 5.7% organic growth. On a foreign exchange, it accounted for minus 2.8%. This strong organic performance was particularly supported by curves under long-term framework agreements, as we explained last February. on a very good momentum in data center activity. Renewable activities also remained well-oriented. This high growth level was achieved despite the usual seasonality, where Q1 is usually a low quarter in terms of organic growth. At the same time, our accessory subsegments continue to deliver double-digit organic growth, illustrating sustained demand for high-value added solutions developed by ongoing grid modernization on smart grid requirements. Overall, Power Grid is benefiting from excellent market trends on a high level of visibility with a solid pipeline across utilities, data centers, and grid accessories fully aligned with our mid-term growth ambitions. And we continue to see the increase in the average duration of a framework agreement translating the growing and urgent needs from DSOs for the coming years. Let's now turn to slide 8 regarding PowerConnect. Start-up sales in PowerConnect reached 647 million euros in Q1 2026 compared to 603 million in Q1 2025. That represents 7.2% total growth, including an 8% contribution from acquisitions, 2.5% organic growth, and the foreign exchange accounting for minus 3.2%. We continue to see a progressive recovery in PowerConnect in some countries, although it remains uneven across geographies. The positive signals we observe in Q4 2025 show has further materialized in Q1 in several European countries, such as France, Spain and Italy, while Nordic countries remain more challenging, as we have explained in the last communication in February. In the Pacific, activities started to stabilize, supported by recent management changes. The growth in the Quaker was strongly supported by M&A, which is a key pillar of our strategy. On the recent Acquisition of Caballer City in Spain and Electron Cabal in Canada contributed significantly to growth, and their integration is progressing very well, fully in line with our roadmap, particularly in strategic segments such as data center and fire safety. Overall, PowerConnect shows solid market fundamentals, and we pursue the deployment of our high-value-headed solutions. and focus on premium customers, which support safety and proper growth, and provide the group with agility and resilience. I will now hand over to Vincent for the night of our Q1 2026 on the presentation of the public choir.

Thank you, Julien. Good morning, everyone. So let's start with our standard sales reach. We moved from 1.478 million euros of standard sales in Q1 2025 to 1.497 million in Q1 2026, and an increase of 19 million corresponding to 1.3% total growth. The first block on the graph is organic growth, which contributed to plus 0.1% at group level. This reflects a very solid 4.9% organic growth in our electrification activities, fully in line with our roadmap, which was offset by a negative 24.1 organic decline in other activities many links to metallurgy, as explained previously by Julien. We had a minus 2% foreign exchange impact, primarily related to movements in the US dollar and the Canadian dollar, which temporarily weighed on reported growth. The remaining block is linked to scope contribution, adding plus 3.3% driven by the consolidation of electrical cables in Canada and cables RCT in Spain with our PowerConnect segment, and which are both performing in line with our integration roadmap. Talking about acquisitions, let me now present the acquisition we have just announced in the U.S. I am very pleased to present you this acquisition, which is a very important step in Nexens' journey. We have signed an agreement to acquire 100% of our public wire an established American manufacturer of low-voltage wire products headquartered in Cincinnati, Ohio, that will form part of our Power Connect segment. Let me walk you through what we're acquiring, why it is a strong fit, and what it means financially. Republic Wire was founded in 1982 and is a family-owned business that has built an excellent reputation as a high-quality actor in low-voltage wiring products. The company serves electrical wholesale distributors, utilities, and municipalities across the United States and Canada. This is a platform with a nationwide commercial footprint. On the numbers, Republic Wire generated approximately 520 million euros of current sales over 12 months to February 2026. This is a business of meaningful presence with a profitability profile that reflects the quality of the assets. From an industrial perspective, this is a fully invested platform. The company operates a single manufacturing facility and a newly completed warehouse and distributor center. Importantly, Pepperdick Wire has recently completed a significant expansion program that will be fully online by the end of 2026, increasing its production capacity by approximately 30%, which will be reflected in its 2027 results. We're acquiring a platform that has already been pre-funded for growth by the existing owners. The business is operated by more than 200 highly skilled employees and led by the founders, Ron and Jeremy Rosenbeck, who will remain in place post-closing. We've known Ron and Jeremy for many years, and there's a genuine cultural alignment between the two organizations. Turning to the financial terms of the transaction, we're acquiring 100% of what we require for a total enterprise value of approximately 680 million euros, converted at the current dollar-euro exchange rate. There is also an earn-out designed to align interests of up to 43 million euros potentially payable in 2028 based on performance through year-end 2027. We're referencing a 2027 multiple in order to reflect the earnings power of the recent capacity expansion. The entry multiple represents 7.6 times 2027 estimated adjusted EBDA after run rate synergies and before an out. We believe 7.6 times is a very attractive entry point for an asset of this quality in a market of this size. Before synergies, the multiple is 10.3 times, which compares favorably to recent transactions in the market. And there is also the potential for the transaction structure to provide tax benefits for Nexon's overtime. The transaction would be financed through a combination of debt and existing cash on our balance sheets, consistent with our disciplined financial strategies. For formal net leverage, it is expected to rise to approximately 1.2 times net debt to 2025 adjusted to BGA, and then deliver to comfortably below one time by the end of 2028. We expect our BB Plus credit rating from S&P to be preserved, and we remain fully committed to maintaining a disciplined financial policy. We have identified approximately 23 million euros of run rate synergies to be captured within three years. The phasing is front-loaded with approximately 50% being achieved in year one. I will come back to these in the next slide. And finally, the transaction is expected to be immediately EPA-secretive before synergies and before monetization of intangibles and implementation costs. Closing is expected early in the third quarter of 2026. subject to customer regulatory approvals, were well prepared to hit the ground running on integration from day one. Let me now present the strategic rationale and why we're confident in the synergies we see in this combination and strong value creation potential. The U.S. low-voltage market segment is estimated at approximately 12 billion euros, driven by sustained demand across the residential, commercial, and data center channels. This is one of the largest growth opportunities in low and medium voltage cable globally. Building a diversified presence in the United States has been a clear strategic priority for Nexens, and Republic Wire gives us exactly the platform to achieve that goal. The industrial rationale is built on three pillars. First on platform, Republic Wire will allow Nexens to establish an extended manufacturing and distribution platform within the U.S. geography, complementing the recent acquisition of electrical cables in Canada. This creates a real platform for future organic and inorganic growth across the region. Second, on-channel, we establish immediate direct access to the residential and commercial channels through the public's strong network of sales agents and distributors, complementing our existing global distributor relationships. There is also an opportunity to sell NextSense's broader product suite, including via voltage in additional high-growth verticals, including data centers. And on product, the public wire brings a focused portfolio and, sorry, an efficient and recently expanded manufacturing footprint and a highly skilled workforce. Nexos brings an extensive global product portfolio and advanced proprietary manufacturing technologies, so the value creation goes in both directions. On synergies, we've identified approximately 23 million euros runway synergies across three clearly identified streams focused on revenue growth and margin enhancement. First, in cross-selling, where we can offer Nexon's comprehensive products offering particularly medium voltage and grid solutions through both Republic Wireless Distribution Network and our own existing global distributor relationships. Second, on technology, where we expect to deploy our proprietary manufacturing IP inside Republic Wire's facilities to reduce material consumption and improve product performance. And third, industrial synergies through investments and vertical integration enabled by increased scale. And if you take a step back and look at our footprints, on slide 14, you can see that the acquisition of Republic Wire diversifies and expands our footprint in North America. It is a particularly attractive geography given its mid-term growth opportunities, partly driven by the momentum in data centers, which is significantly increasing power infrastructure needs across the U.S. We already have strong relationships with global distributors in the region, which we will use to commercialize this additional capacity. It will also enable us to further optimize our industrial footprint and mutualize our capabilities to compete more effectively for larger-scale projects, including data centers. The U.S. is a healthy, competitive landscape with meaningful profitability levels. In summary, we believe that this transaction offers a very strong strategic rationale. It will accelerate our growth prospects by expanding our access to a high-growth geography. It is financially compelling and value-creating for Nexon's shareholders. We have already devised our integration plan, and the whole Nexon team is totally mobilized to make this deal a success and a foundation for further growth. With that, I now hand it over to Julien for the outlook.