Nexans Unsp/Adr

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.

Thank you, Vincent. So before we move to our 2020 guidance, while remaining mindful of the current geopolitical tension on the international stage, we would like to remind you the key levels we have in place to protect and improve our margin in this environment of inflation. So first, our main drivers of margin are pricing selectivities supported by strong underlying trends in electrification, across our segments, as well as sustained demand for high-value added solutions. And also, we have the second part, which is the operation experience, meaning a margin-over-volume approach, strict pricing discipline on the deployment on the discipline on our shift methodology. Second, Nexon has developed increasing agility in our inflationary context to protect its margin, thanks to a strong and long-lasting relationship with our key customers, what we call platinum customers. Also, we have indexation closed embedded in our contract to basically go for a pass-through. And third, we are managing with real-time pricing tools the price in the market, all of which ensure that our pricing currently reflects our cost structures on our projects. And last but not least, on the supply side, let me take this opportunity to highlight that despite current Geopolitical tension, we do not expect impact on our aluminium sourcing. We source, as you know, primarily from a European reserve in the Middle East, in line with Nixon's debate choice to secure low-carbon aluminium, and hence we don't see any risk on the sourcing of aluminium. Let me now move to the next slide, slide 17, regarding the guidance. So for 2026, we reiterate our full year objectives with EBITDA between €730 million to €810 million on a free cash flow between €210 million to €310 million unchanged versus what we shared with you during the last full year 2025 results. As a reminder, this assumes a shorter first half 2026 compared to second half 2026 and it does not assume execution of the Great Interconnection Project in 2026, as we have already discussed. This guidance is also given on our current perimeter and does not yet include any contribution from the Republic Wire acquisition, which is not closed at this stage. Finally, regarding the situation in the Middle East, we continue to monitor the situation closely. So, overall, NextSense is in great shape, with a robust business model evolving into attractive markets. Our businesses are performing well, the structural trends delivering the innovation remains very strong, and our mid-term trajectory is unchanged. The acquisition of Republic Wires, that we have known today, reinforce our positioning as a pure player of electrification. It significantly threatens our geographic positioning, in a highly dynamic market and expand our platform for profitable growth. All of these give us a high level of confidence in the future and in our ability to continue creating value for our stakeholders. With that, thank you all for your attention, and with that, we will now be happy to take your questions.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. If you wish to withdraw your question, please dial pound key 6. The next question comes from from JP Morgan. Please go ahead.

Yes, hi, good morning. I have a question on Republic Wire. So in the last 12 months to February this year, Republic did 520 million in revenues. Can you give us a bit more indication how does that compare to revenues in recent years? And has there been any impact on their margins from copper tariffs, which seems like giving some advantage to companies that have vertical integration in U.S. road mills, which is not the case for Republic Wire. So that's the first one.

Okay. So Republic Wire is growing year after year. They are very dynamic markets. They are expanding their capacity. They did – investment into their plants since, I would say, strong investment in their plants in 2023. So the quality of their set, the quality of the machine are at a very good high level, and it helps them to grow their cells in 2023, 2024, and, of course, in 2025. And we'll continue to do so. As you've seen in the press release, we will have an opportunity to grow 30% capacity additional. So that will continue in the years to come. They managed very well their transition of the tariff because there has been no negative impact on the margin of the past year despite the tariff implementation.

Thank you. And my follow-up question is also on the public wires. I think you mentioned there will be 23 million cost to drive synergies. Again, I mean... This company employs only 200, around 200 employees and doesn't look like there is a big cost out opportunity. So I'm wondering if you can provide where this 23 million cost will be, how this 23 million cost will be used for driving synergies. Thank you.

Yes, for sure. So in terms of synergies, more or less 50-50 top line on industrial efficiencies. There are some We have identified the industrial parts, namely the component aspects, because they do not have any component lines internally. We do have. We have spare capacity in our operations in Canada, so that would be a very quick fix to improve the efficiency on that part. There is also some – we have a program called Optimum where we are also optimizing of a product. We have identified that it's an area of improvements. They are purchasing synergies as well. So all this will be driven on the, I would say, industrial aspect. And regarding the top line, you know that we have some excellent relationship with what we call platinum distributors worldwide. We are in close relationship with these platinum distributors. They are very well represented in the U.S. and today they are not yet customers of Republic. So the aim is to quickly move to grow business with these distributors that are aiming for differentiation, aiming for innovation, and this is what we will scale to Republic. So this is one second. Also, Republic, as you've seen, is very much focused already on industrial applications. We do have close relationship with... the big four of data centers on combining Canadian and South America medium voltage plus low voltage from the Republic. We will drive some data center business. This is a big focus for me and for the team to drive business in data centers using the U.S. footprint of Republic.

Maybe just a final one. I think you said in earlier cell site call This synergy takes into account the current tariff structure, and if we haven't had tariffs, then there could be upside. Can you quantify, let's say, if tomorrow tariffs goes away, then what sort of upside we might see on synergies?

Thank you. It's a good point, Akash. So, indeed, the reason why we are so very confident with Republic is that we know this company very well. We used to supply copper rods from a Montreal metallurgy business to the Republic for many years. So we know them. We know the team. We know the quality of the team. As you know, since the tariff last August started, we stopped delivering to them for obvious reasons. As soon as the tariff will be dropped, hopefully, of course, here we have no certainty, but as soon as it will drop, we will restart this. We have not quantified this yet. So I cannot give you a number yet, but for sure it will increase the synergies for years to come as long as the time for copper will be removed.

Thank you.

The next question comes from Nabil Najib from Deutsche Bank. Please go ahead.

Yeah, hi. Thanks for taking my questions. I've got a couple. First, on transmission, do you have any updates you can give us on the MI project pipeline and the progress being made on saturating MI capacity with short-term repair work and smaller projects? Secondly, on grid, could you maybe talk about what's been driving the performance here? Has activity in the data center and Google space been higher than the previous expected? And so do you expect that to continue to be the case? And also, if you could also talk about the growth in the accessory side, perhaps you could further quantify the double-digit growth that you mentioned there and what the margins look like.

That would be great. Okay. So, really, we have said that in Q1, we are finishing GSI last part of August, so we have done that according to our plan. And we also said that just after we will produce and win some EMR, so repair orders, shorter orders, we also win these orders. So the line of MI is still producing today these small repair activities. And for the rest of the MI, let's say looking forward, because I'm sure this is what you have also in mind, we are also in the tender of other MI projects. So far I cannot say because we're in a tender phase. But this is the ongoing aspect of our plan and aspect of what we have communicated last February. Regarding the grid, well, the grid, we are very confident about the growth, very resilient business. As you remember, we have been long-term firm agreement with our customers. On top of this, we also have, in Q1, have been some very large orders of data centers. By the way, in the U.S. but not only as well as in Europe. That is also reinforcing this growth looking forward. Some of these large orders will come in H2, because that's basically we are currently producing, delivering that in the second half of 2020, 2026. So, completely in line with our expectations, I mean, very good regional business in grid. And accessories, while the Q1 was interesting, Very dynamic accessories. Remains double digits. It's even higher in terms of double digits than what we have experienced in last year, 2025. So, on the other, what we always said regarding the accessories business is above 20% EBITDA margin. So, extremely positive on the grid on the accessories part.

Got it. Thanks, Joanne.

The next question comes from Chris Leonard from UBS. Please go ahead.

yeah hi guys and maybe one from me on the transmission business i mean you spoke about being booked out into 2028 and obviously we've also seen momentum recently on offshore wind could you maybe speak to the outlook for projects here for you guys and what you're seeing on pricing at the moment and then uh second question uh you just mentioned there on power grid and in terms of winning new orders into day centers can you maybe comment on how big of an exposure north america is currently for the power grid business or in 2025 and where you see that going in terms of a geographic exposure by sort of 2028. thank you so the transmission so regarding the

the pipeline of projects. So I think the things are, you know, in this large project, long cycles, they are not moving like we are after the other ones. We are on the same trend as what we explained last February. So we do see large projects to come, mostly in terms of end of 2026, a big part will be in 2027, both in XLPE, so HVDC or HVAC, as well as MI. So you see the geopolitical change with Iran reinforced the willingness from the European countries to build autonomous energy sovereignty. So that reinforced the message of building their own power generation of wind offshore. So we do see that strengthening the years to come. In terms of pipeline of projects, short-term, it's more end of the year, mostly 2027, that we'll see this large project to come. Difficult to talk about the margin because we are, of course, preparing this standard, so we cannot communicate on the margin pricing whatsoever, but we do see the regain of, let's say, attractivity for the wind offshore. Power grid. So we have a program in the U.S. This is ramping up. We have established in 2025. Many focus in data centers. Many focus in . So this is going very fast. Difficult to give you a number because this is still the early stage. But what I can tell you is that the order we are winning in data centers are let's say, large-scale orders. We are rerouting our capacity in medium voltage we have in South America and Canada to this market in the U.S. because it's an attractive business for us.

And just to complement, that's where a deal like the Republic Wire makes a lot of sense and will increase our exposure since we'll be able to have channels to sell more grid products into the U.S.

That's great. Thank you.

The next question comes from Jean-Francois Grandjean from AutoBHS. Please go ahead.

Yes, thank you. Good morning. Three questions on my side. The first one for... after the acquisition of Republic Wire. Could you give us your exposition to the U.S. market on percentage of your sales and for the North America, the same question, the percentage of your sales expected? The second question, in the press release for the transmission business, you mentioned some cost-canceling measures to adapt to the structure. So could you give us some more color about what you What do you mean when you mention the cost cutting or cost reduction for sure? And the last question, For the connected business, you mentioned this growth, organic growth for the first quarter. We mentioned some growth for South Europe, but more difficult for the Nordics. Could you give us the growth percentage for the South European countries, France, Italy, Spain, etc., and the percentage of decrease for the Nordics area? Thank you.

Okay, so I will start with your first question regarding the exposure of Nextance to the North America market. So I'd like to quickly explain at the beginning of this session. So we used to have €350 million sales in North America, mainly focused in Canada. And since we acquired Electro last December and today, we are aiming to close Republic in some weeks. We will be above a billion euros, so that represents more than 20% of Nexon's exposure to Nostromica. This does not include the metallurgy in Montreal and does not include the Charleston plant. It's pure grid-on-connect exposure. Regarding the transmission, Olivier Vincent,

Yeah, so on cost setting overall, we've launched a bunch of self-help measures since the beginning of the year. We know we have work to do on this. The end of the divestment programs allow us to basically refocus and recentralize a number of things. The big focus are the traditional SG&A focus and kind of the pure cost actions, so we've launched specific things on that aspect. And then we're also looking at a lot of purchasing where we're trying to drive more efficiency and better productivity in our purchasing activities. So those are the two biggest levers that we've been pushing and are starting to deliver with a specific program with, you know, very clear ambitions for this year and maintain the run rate after that. So that's the two big focus points.

And regarding your first question, Jean-Francois, so we do not share normally the sales per country. But what I can tell you in ballpark is that France, Italy, and Spain, we are in the average of the Connect business. So we do see some slight increase there, which basically confirms what we have seen in Q4 last year. Unfortunately, Nordic remains negative territories. We do not see any recovery of this market, specifically Sweden, which is still in the negative parts. So that's for us, that's the case today. No sign yet of recovery. We will see our plans, our discussions with our customers tell us that maybe in H2, but so far in Q2, we don't see any big recovery.

Okay, thank you so much.

Thank you.

The next question comes from Eric Lomari from CICCIB. Please go ahead.

Yes, good morning. Thanks for taking my question. I have three, if I may. The first one on the project in translation you mentioned, you mentioned the project at the end of 2026. But regarding the project for which you are currently, you know, or for the MI line-related project. Do we expect some announcement before the end of 2026? I've got a second question on the Republic deal. You mentioned the value creation on the slide, but when should we expect that the return on the deal to be above the work of Nexens when you expect to create value with this deal. Another question still on this acquisition. Could you share maybe with us if there is any specific reason why the family decided to sell today to Nexens? Thank you.

Okay, so I will start by your first question on MI. So, yes, we are in the tender phase. We follow this very closely, as you can imagine, and we do expect an answer by mid-year. So, of course, it will not be end of the year. Hopefully, it will be much earlier. So, the target today is to have an answer by mid-year of the result of this tender. Regarding Republic, I will start with your question again, the family, why they tend to sell the company. So the owner, Ron, is about 78 years old, and his willingness was to continue development of his business, joining force with a large group. That was basically his wish. But he's ready to work with us the next two years, to end of 2027 at least. And we have also his son, which also has an active role that he's also willing to continue to work. So it was really, Ron was a person that wanted to basically manage the transition to a large group to continue the journey of the Republic. That was his main motivation.

And on your second question regarding the return on investment, essentially this deal improves our roadshed profile as soon as 2027 and puts us above our current estimates for 2028. So it's an improvement on current profile coming very soon. Thank you. Thank you.

The next question comes from Alessandro Cecchini from Ecuador. Please go ahead.

We cannot hear any question. Alessandro, we can hear you. Yes. Can you hear me? Hello? No, we cannot hear.

Maybe let's move to another question and then we come back on Alessandro just after.

As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. Alessandra Cecchini, your line is now unmuted. Please go ahead.

Can you hear me? We still cannot hear anything.

The next question comes from Scott Humphries from Barenburg. Please go ahead.

Hi. Thanks for the question. Can you hear me okay?

Yes.

Perfect. So first one from me just on CapEx, actually. So at the November 24 Capital Markets Day, you guided to the sort of 1.2 billion of cumulative CapEx, 25 to 28, so about 300 million per year. when we think about this sort of 70% of that, or 200 million, which is going outside of, and kind of where that's going outside of the medium voltage plant in Morocco and the recycling facility in France, should we expect that quite a significant chunk of this will now be redirected towards the U.S. following this acquisition? Or if you could help us understand the sort of composition of that remaining capex, that would be helpful.

Yeah, sure. So the overall plan of 1.2 billion is is correct and we're on track for that. We expect our CapEx levels to, once the wave of strategic investments is completed in transmission and the two projects you mentioned, will decrease significantly in 2027. We're buying an asset in the U.S. that is significantly invested. Part of the reason we're using 2027 as a reference here for multiples and valuations is because that's when the fully grown, let's say, plant and warehouse will be completed and running. And so we don't expect to have to put a lot more CapEx on the site. We're acquiring something that is already finishing its wave of investment from a CapEx standpoint to expand its capacity.

Okay. That makes sense. Thank you. And the second question on transmission and the growth outlook for this year. I mean, you talked about transmission returning to positive organic growth in the second half. I think the consensus that you've compiled coming into the quarter had about minus 2% organic growth in H2 for the full year. You've talked a little bit about the MI production capacity and that topic. You've also got the new cable laying vessel coming online. How should we think about what a more normal level of growth in transmission looks like in the full year, given these factors?

Yes, so you're right that compared to the explosive growth that the business experienced in the last two years, clearly 2026 will be more normative and normal. We have a strong Q1. We expect H1 to be a flattish, single-digit type of growth. And then things will start to get a bit more positive in the second half, but on a more run rate basis. The expansion of the boat capacity, essentially, the new boat coming in doesn't extend the capacity significantly because it's replacing a boat that we're currently using. So we're basically going to replace capacity that we rent for capacity that we own with improvements in terms of synergies and efficiency, but it won't be a massive expansion. And so... So for this year, really it's about execution and driving the – using the capacity we have and getting the business to deliver on the backlog we have.

Thanks. And if I just ask a very quick follow-up on the cable-laying vessel side, is there anything, any additional color you can give us? I know that previously we've heard from yourself or peers that the market for chartering cable-laying vessels from third parties, I think one of the data points was that you could pay about three times as much to charter a vessel as it would cost to use your own. Has that sort of dynamic continued, or what are you seeing in terms of the, I guess, the the advantage that you're gaining from having that in-house installation capacity.

I will ask this question to be answered by Vincent because he's an expert on this part.

Yeah, Vincent speaking. Hello. Indeed, we still see a gap, of course, between the vessel that we can charter on the market, the multipole that you indicated by free, It could be this one, but to be honest, it depends really on the size of the vessel. If you are looking for a vessel with large capacity, it would be in this range. If you are looking for a vessel with a smaller capacity, typically a 5,000 ton, it could be smaller. But again, for us, the key topic is to have EPC projects with our own vessels in order to derive the project and to limit the interface to other customers. This is really what we are looking for.

That's great. Thank you.

As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. The next question comes from Sean McLaughlin from HSBC. Please go ahead.

Thank you. I have a question just generally on the low-voltage US market. I guess In terms, you said on a call earlier this morning that you'd like more U.S. M&A. Just thinking of how fragmented the low-voltage market is, are there a number of similar-sized players that are potential M&A targets? Would you go small and more focused? Just a little bit of a lay of the land, and again, what kind of, market share ambitions you have in the medium term in the U.S.? Thank you.

Okay, so basically in the U.S., low voltage, you have mainly two players. I will not mention them, but I'm sure you know them. That represents a big chunk of the business, maybe two-thirds of the business. Then you have a series of several companies on the side of Republic, that are usually family-owned businesses that we know quite well because, as I said this morning, we do supply them in Copper Rock or Montreal for many years, so we have a good connection with them. Ambition is continue to grow in the U.S. low-voltage or medium-voltage, by the way, both activities in the U.S. Like this market, it's a dynamic, processing market, high growth markets with very interesting verticals such as data centers and others. I will not give a specific number of short wallets that we are aiming for because, of course, that depends on the conditions, depends on many elements. We want to be selective in the M&As. We want to make sure that what we pay makes a lot of sense. But there are still a lot of opportunities in this business to grow our share of wallet in these markets. We have been active in this in terms of pipeline. We are discussing with some of them on that opportunity to grow, but we don't want to make stupid decisions in terms of purchasing price.

Understood. That's very clear. And in terms of, I guess, overall capacity in the market, you know, this company, for example, is growing 30%. We're hearing of other capacity increases. Do you... Is your overall view that the US market remains undersupplied, that there's more capacity required for this market? Would you think of potentially increasing capacity within Republic to meet future demand, or is this more inorganic expansion?

So... In general, the growth rate of the cable low voltage and medium voltage in the U.S. is going fast. You know, partly driven by data center, but not only. So we do see that there is some, on your right, there is some ongoing capacity extension with some of our colleagues. But for us, really, is to remain very selective in the type of customers, selective in the product portfolio. Our strategy remains the same, even if it's in the U.S. We will be looking at both options, organic and inorganic, in the U.S. Remember that we also have a strong positioning in Americas, South America and Canada. So it could be a combination of all this. Typically, the data center that we won recently, the large data center is coming from a series of plants. So, we'll do a combination of all this. We are not only in one direction. We'll be looking at all opportunities in front of us.

Super. Thank you.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Okay, so thank you all for your questions and discussion today. So Q1 once again confirmed that Nexon's fundamental agreement is solid and resilient. And through our transformation to a pure player electrification, we have built a robust model of value creation which positions Nexon as a key enabler of energy transition and a critical contributor to Europe's energy sovereignty. On the external growth, we are very happy we could announce the deal today with our Q1 publication, announcing once again our commitments to our strategy. I would like to thank you again for your attending this call, and we'll hand over now to the operator for closing remarks.

Thank you for attending the Nexen's Q1 2026 Financial Information Call. You may now disconnect.