By Gus Trompiz and Marie Maitre
PARIS, Feb 10 (Reuters) - Nexans, the world's largest cable maker, predicted a slow start to business in 2010 and pledged more restructuring efforts after a slump in industrial demand dragged down its sales in 2009.
'We expect 2010 to be a difficult year,' Chief Executive Frederic Vincent said at a presentation of the company's 2009 results. 'As of today the first half is most uncertain.'
The company said it would pursue further restructuring this year, with 60 million euros ($82.3 million) budgeted for streamlining measures, after job cuts and other moves helped it reach its margin target last year in the face of falling sales.
'It wouldn't be surprising if Europe was most affected (by restructuring), like in 2009,' Chief Financial Officer Frederic Michelland told Reuters on the sidelines of the presentation.
Nexans, whose shares slipped 1.1 percent to 55.20 euros by 1400 GMT, closed seven sites in 2009, leading to 1,000 job cuts.
Nexans reported a fall in 2009 sales to 4.03 billion euros from 4.78 billion in 2008, while its operating margin narrowed to 6.0 percent -- in line with its target -- versus 8.9 percent a year ago.
Analysts welcomed Nexans' margin performance but were disappointed by the size of its 2009 sales decline and the company's views about this year's outlook.
'The main disappointments came in the sales decrease in the energy infrastructure and industry divisions,' analysts at French broker Gilbert Dupont said.
FURTHER ACQUISITIONS
Cables represent 95 percent of total sales at Nexans, which is one of the world's largest private consumers of copper and competes with Italian cable maker Prysmian SpA. The remaining 5 percent of revenue is made from electrical wires.
Michelland said Nexans was planning new acquisitions as its reduced borrowings give it the financial fire power to pursue international growth plans. He said the group was considering acquisitions in the energy infrastructure sector outside Europe.
Nexans' capacity to make acquisitions had been reinforced by a slashing of its net debt to 141 million euros at the end of 2009 from 536 million a year earlier, he said.
'In view of the extremely solid financial situation ... and the relative size of the group, we can envisage deals of a comparable size to that of Madeco, or possibly even bigger,' Michelland told a conference call earlier on Wednesday.
Nexans bought the cable activities of South American group Madeco in 2008 for $448.5 million plus 2.5 million shares.
Nexans said sales should be stable in the first quarter versus the preceding quarter after a 17 percent slide in like-for-like terms for its main cable activities last year.
The group also said it slashed its dividend by half to 1 euro, in line with market expectations.
Nexans did not give guidance beyond first-quarter sales, although Vincent said last year's 6 percent operating margin represented a base for the company.
Pricing conditions were currently similar to those seen last year, when Nexans only made minor price cuts in some areas as it sought to protect its margins, he said.
Nexans said an increase in margins this year would notably depend on a recovery in sales volumes, especially in the building market and certain industrial sectors.
(Additional reporting by Cyril Altmeyer; Editing by David Holmes)
($1=.7294 Euro)
((For a factbox on Nexans, see))
Keywords: NEXANS/ (gus.trompiz@thomsonreuters.com; +331 4949 5218; Reuters Messaging: gus.trompiz.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
PARIS, Feb 10 (Reuters) - Nexans, the world's largest cable maker, predicted a slow start to business in 2010 and pledged more restructuring efforts after a slump in industrial demand dragged down its sales in 2009.
'We expect 2010 to be a difficult year,' Chief Executive Frederic Vincent said at a presentation of the company's 2009 results. 'As of today the first half is most uncertain.'
The company said it would pursue further restructuring this year, with 60 million euros ($82.3 million) budgeted for streamlining measures, after job cuts and other moves helped it reach its margin target last year in the face of falling sales.
'It wouldn't be surprising if Europe was most affected (by restructuring), like in 2009,' Chief Financial Officer Frederic Michelland told Reuters on the sidelines of the presentation.
Nexans, whose shares slipped 1.1 percent to 55.20 euros by 1400 GMT, closed seven sites in 2009, leading to 1,000 job cuts.
Nexans reported a fall in 2009 sales to 4.03 billion euros from 4.78 billion in 2008, while its operating margin narrowed to 6.0 percent -- in line with its target -- versus 8.9 percent a year ago.
Analysts welcomed Nexans' margin performance but were disappointed by the size of its 2009 sales decline and the company's views about this year's outlook.
'The main disappointments came in the sales decrease in the energy infrastructure and industry divisions,' analysts at French broker Gilbert Dupont said.
FURTHER ACQUISITIONS
Cables represent 95 percent of total sales at Nexans, which is one of the world's largest private consumers of copper and competes with Italian cable maker Prysmian SpA. The remaining 5 percent of revenue is made from electrical wires.
Michelland said Nexans was planning new acquisitions as its reduced borrowings give it the financial fire power to pursue international growth plans. He said the group was considering acquisitions in the energy infrastructure sector outside Europe.
Nexans' capacity to make acquisitions had been reinforced by a slashing of its net debt to 141 million euros at the end of 2009 from 536 million a year earlier, he said.
'In view of the extremely solid financial situation ... and the relative size of the group, we can envisage deals of a comparable size to that of Madeco, or possibly even bigger,' Michelland told a conference call earlier on Wednesday.
Nexans bought the cable activities of South American group Madeco in 2008 for $448.5 million plus 2.5 million shares.
Nexans said sales should be stable in the first quarter versus the preceding quarter after a 17 percent slide in like-for-like terms for its main cable activities last year.
The group also said it slashed its dividend by half to 1 euro, in line with market expectations.
Nexans did not give guidance beyond first-quarter sales, although Vincent said last year's 6 percent operating margin represented a base for the company.
Pricing conditions were currently similar to those seen last year, when Nexans only made minor price cuts in some areas as it sought to protect its margins, he said.
Nexans said an increase in margins this year would notably depend on a recovery in sales volumes, especially in the building market and certain industrial sectors.
(Additional reporting by Cyril Altmeyer; Editing by David Holmes)
($1=.7294 Euro)
((For a factbox on Nexans, see))
Keywords: NEXANS/ (gus.trompiz@thomsonreuters.com; +331 4949 5218; Reuters Messaging: gus.trompiz.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.