Cabling and Electrification – Q1 Results from the Big Three
By Marcus Emmet
Marcus Emmet, a specialist consultant in Beaumont Bailey’s Smart Buildings and Electrification practice, takes a look at the recently released financial reporting data from the big three cabling giants – Nexans, NKT and Prysmian. Marcus delves into the numbers and what the Q1 results mean in relation to the rest of the electrification market.
Nexans
Nexans remains a global leader in the design and manufacture of cable systems after going through a major transformation in the last 5 years, leading it be a pure electrification player. 2024 has shown Nexans continue to rotate their portfolio towards this electrification goal, whilst scaling up in value to significantly step-up performance and cash flow generation.
2024’s first quarter saw Nexans sales grow to €1.69bn, up 2.8% on the same period in 2023. Notable success has come from the electrification focused businesses, which saw a 6.7% increase on last year. This successful Q1, shows the group is well set up to capitalise on the megatrends driving the electrification process forward, and perhaps best positioned to meet the latest customer needs as they change from product customers, into demanding more sophisticated systems and interconnected solutions. The acquisition of Italian cabler La Triveneta Cavi also capitalises on the recent market focus on fire safety in the low voltage arena.
NKT
There was much talk surrounding NKT in 2023 after achieving a year of extraordinary growth and a record order intake, which brought their high voltage order backlog to €10.8bn. This trajectory has continued in Q1 2024 as the business organically grew 27% compared to Q1 2023. This strong quarter now means they have achieved double-digit growth in both revenue and operational EBITDA for the sixth consecutive quarter.
The main driver of growth came from the Solutions business. NKT’s Solutions is the largest business line and their broad offering covers technology leading solutions across voltage levels, particularly DC high voltage.
As demand for power transmission over long distances has increased, DC technology has rapidly become the industry standard for high-capacity transmission power cables. As we are seeing power cable contract awards increasingly are based on DC technology and AC technology maintaining relevance in the offshore windfarm, NKT looks set to continue its strong growth, particularly in their key geographical areas of Northern Europe.
Prysmian
Overall, Prysmian’s quarter was good and showed strong signs that profitability has significantly improved across the board. The best performing divisions were the Transmission and Power Grid businesses which performed much better than in 2023. Overall, Q1 showed that the push towards electrification is momentarily not as strong an initially promised, however strong double digit growth in the renewables segments is highly encouraging and undoubtedly Prysmian will continue to capitalise on this with strong product offering.
The big news from Milan is undoubtably the €3.9bn acquisition of Encore Wire in the US which substantially increases Prysmian’s presence in the US and makes it the biggest region in the group. Encore Wire offers great synergies with Prysmian, and with the group known as one of the best around at integrating acquisitions, significant EBITDA improvements ahead of schedule should be expected!
If you would like to discuss any of the thoughts and topics raised in this piece or would like to learn more about how Beaumont Bailey can support your executive hiring strategy, please reach out to Marcus: marcus.emmet@beaumontbailey.com
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