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The world changes and Nexans changes with it
In a global economy where markets, technology, customers and users are changing ever more rapidly, Nexans set 3 key goals to secure its global leadership: establish sustainable profitability, invest in growth drivers, and make the Group more attractive to its customers and employees.
A targeted acquisition strategy
Nexans drives its expansion into high-potential segments and regions with targeted acquisitions supported by organic growth. The Group has acquired 8 companies in 5 years. It is the global leader in shipbuilding cables with Kukdong (Korea). It gained market share in energy cable accessories with Petri (Germany), and in special cables with Cabloswiss (Italy). Nexans owns solid, well-performing businesses in growth regions, such as Furukawa Cabos de Energia in Brazil, Daesung Cable and Kukdong in Korea, Liban Câbles and its Egyptian subsidiary ICC in the Middle East and Lioa in Vietnam.
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2005-2007
The strategic plan goals |
10% (1)
sales growth
from 2006 to 2007
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5.2 to 5.5% (2)
operating margin
in 2007
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8 to 8.4%
after-tax ROCE
in 2007
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(1) Sales at constant scope.
(2) Operating margin as a percent of sales, at constant copper prices. |
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Earning our independence
Nexans strives to earn its shareholders’ trust by generating solid, continually improving performance. The Group undertakes activities that serve to raise its share price and allow it to continue with its dividend increase policy. Furthermore, as part of responsible corporate governance, Nexans provides investors with faithful, transparent information and makes its best efforts to keep the commitments it has given to its shareholders.
A STRONGER, MORE EFFICIENT COMPANY
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Efficiency and cost reduction
In the developed markets, Nexans has refined its manufacturing and logistics operations by using fewer, more specialized production units. All over the world, the Group has improved process reliability and flexibility, and invested in systems that allow better inventory management and require less working capital, while at the same time improving customer service.
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2005-2007
The strategic plan goals |
- Eliminate loss-making operations
- Streamline purchases
- Increase manufacturing efficiency
- Optimize investment spending
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Refocusing: two divestitures in 2005
As part of a goal to refocus on high value-added activities, the Group sold two activities in 2005. The European winding wire activity was sold to a company 60%-owned by Superior Essex and 40%-owned by Nexans, and the electric equipment distribution business in Norway was sold to Ahlsell. In addition, in early 2006, Nexans sold its distribution business in Switzerland..
Sales+: sell more, sell better
Since 2005, the Nexans sales force benefited from an array of methods for improving sales efficiency and boost their performance, taken from best practices within the Group and other companies. In addition, the Group appointed country Sales Developers to help the sales force seize opportunities more quickly and as often as they arise.
A MORE DYNAMIC COMPANY,CLOSER TO ITS CUSTOMERS
Go where the growth is
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The global cable market is growing 2% to 3% annually. However, in China, Russia, and the Persian Gulf, growth exceeds 10%. Markets in other countries in Central Europe, Latin America, Africa, and Asia are also expanding rapidly, due to strong local demand from international customers who relocated to these regions in order to build competitive production sites. Through acquisitions, joint ventures, and commercial partnerships, Nexans has accelerated its deployment into these regions for long-term growth. Sales in emerging markets have increased over 70% in 5 years (at constant non-ferrous metal prices).
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2005-2007
The strategic plan goals |
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40% of sales from high value-added products
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50% growth in 19 high-potential market segments, for a 500 million euro increase between 2005 and 2007
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10% of sales in Asia
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Target profitable, high-value segments
Nexans has identified 19 priority market segments, including aerospace, automobile, railway (infrastructure and rolling stock), shipbuilding, material handling (mainly in ports), nuclear, oil and gas, high-voltage, heating cables, safety cables, and LAN, xDSL, and FTTx telecommunications cables. Sales to these market segments rose over 10% in 2005.
A MORE ATTRACTIVE AND MORE CONCERNED COMPANY
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Career management: supporting employees and the corporate strategy
In 2005, Nexans created the Career Committee, an initiative that will be spread throughout the Group until there is a Career Committee in every country, with career reviews led by local human resource managers.
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2005-2007
The strategic plan goals |
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An annual performance review for all employees
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A Career Committee in each country
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A site environmental labeling policy
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Sustainable solutions: challenges and opportunities
High energy and raw material prices are here to stay. Technical and regulatory requirements are becoming more and more demanding. However, Nexans sees these as not only challenges, but also opportunities to highlight its technological leadership and differentiate itself to its customers, through increasing the safety and useful life of its products and cabling systems, designing solutions with the same performance levels at a lower cost, and reducing the impact that its manufacturing sites have on the environment.
33 EHP* labeled sites
The EHP label was created by Nexans to address the specific risks its activities pose to the environment. Sites are audited annually. In addition, some sites have been ISO 14001 certified, at the customers’ request, although this label is less demanding than the EHP. By the end of 2005, 33 sites had received the EHP label and 32 were ISO 14001 certified.
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