Trade the Nexans share!
NEXANS

Analysis before buying or selling Nexans shares

Trade the Nexans share!
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Elements to consider before selling or buying Nexans shares

Analysis N°1

The raw materials market will be carefully monitored, and more specifically the price of non-ferrous metals, especially the price of copper, which is an essential material for its activities.

Analysis N°2

As the Nexans Group often communicates on its development or cost reduction strategies, it is quite easy to compare the announced objectives with the concrete results of this company in order to take a position at the right time.

Analysis N°3

We will also be watching with great attention as Nexans signs large-scale, long-term contracts that provide greater visibility for investors and shareholders.

Analysis N°4

The different operations of sale or purchase of more or less profitable companies by Nexans in order to improve its profitability also have their importance for the evolution of the share price on the charts.

Analysis N°5

We will of course keep an eye on the competition in this sector, especially in Europe.

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General presentation of Nexans

To begin our analysis of Nexans stock, we suggest you discover who this company is and what its main activities are. Indeed, you must be interested in this company before speculating on its stock price. We will therefore present it to you in a little more detail with its main sources of income.

The Nexans Group is a French company specializing in the cable industry, with energy at the heart of its strategic development.

More specifically, the Nexans Group offers a wide range of cables and cabling solutions to its customers in various sectors. It is well positioned in this sector, as the Group is today one of the main players in the transmission and distribution markets for energy, industry and construction.

Among the various segments that benefit from Nexans' solutions are energy and telecommunication networks, but also various energy resources such as wind turbines, photovoltaic, petrochemicals, mining and many other segments such as transportation with shipbuilding, aeronautics, automotive and automation or railway equipment.

The Nexans Group also has a strong international presence. Indeed, it is present in industries in more than 41 different countries and employs more than 27,000 people worldwide. In 2018, the Nexans group had sales of 6.5 billion euros. Nexans' share price is currently listed on compartment A of the Euronext Paris market. It is also included in the calculation of the French benchmark CAC 40 index.

Analysis before buying or selling Nexans shares
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The major competitors of Nexans

The Nexans group is a specialist in the manufacture of cables and electrical equipment. Although it is currently well positioned in this sector, it still faces some major competitors that you must know before starting to trade its stock. We suggest you discover here which are the main competitors of Nexans on the international market.

Schneider Electric 

Currently, one of the leaders in the cable and electrical equipment market in the world is the Schneider Electric group.

Prysmian 

Nexans' main competitor at the moment is undoubtedly the Prysmian SpA group. This Italian company, based in Milan, also specializes in the production of energy and telecommunication cables. The Prysmian Group was formed from the former Pirelli Cavi, the world's leading cable manufacturer. This company provides turnkey services from the design of networks to maintenance, including their construction and the supply of components. The Prysmian group was created in 2005 through the intervention of Goldman Sachs, which had just bought the activities of Pirelli Cavi SpA, a subsidiary of the Pirelli group, and which ensured its public distribution. Today, more than 80% of the company's capital is held by the international public and the remaining 20% is held by institutional investors.

Philips

The third place is occupied by Philips, closely followed by Legrand and Safran and its subsidiary Electrical Power.

Other competitors

Finally, we can also count Mitsubishi, Leroy Somer, Grid Solutions, Somfy and Sew Usocome as potential competitors of Nexans.


The major partners of Nexans

For more than 20 years, Nexans has been the preferred partner of the Airbus Group, supplying it with wire, power, data and fire-resistant cables, which account for nearly 95% of the Group's cable requirements.

Alstom

Nexans Group has also been a partner of Alstom in Brazil since 2015. The two companies are working together to create a modern tramway in the Carioca metropolis of the municipality of Rio de Janeiro.

Huawei

In 2016, Huawei Group partnered with Nexans in a supply contract for second-generation optical submarine transponder cables for the second phase of the National Broadband Network project to connect Cameroon to Brazil.

Rexel

In 2018, the French cable manufacturer announced a major contract with electrical equipment supplier Rexel. At the time, this contract was for the cabling of a new petrochemical complex in Oman. Specifically, the contract was for the supply of lead-free cables to Oman Oil Refineries & Petroleum Industries Company's (Orpic) LPIC project. This project is a polypropylene and polyethylene plant estimated to be worth 4.5 billion dollars and aims to reduce Oman's dependence on natural gas and crude oil exports by diversifying downstream.

Total

Also in 2018, the Nexans Group set up a new partnership, this time with oil and energy giant TotalEnergies. The aim of this new project was then to contribute to the acceleration of the development of infrastructures dedicated to electric vehicles. The two companies have signed a partnership agreement that will allow Total to benefit from Nexans' production capacity and industrial know-how, and for Nexans to benefit from G2Mobility's technological lead and Total's range of offers.

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Positive factors for Nexans shares
The factors in favour of a rise in the Nexans share price:

The international positioning of the Nexans group in its sector of activity is of course the first advantage of this company. Indeed, Nexans is currently number 2 in the world in the cable industry, which gives it a certain strength with its suppliers and customers. The diversification of the group's customer base is also very interesting. It should be remembered that Nexans currently makes 42% of its sales in the field of transmission, 27% in the field of industry and 25% with distributors and installers. This distribution allows Nexans to protect itself more against the risks associated with a single type of customer.

The Group is also benefiting from the strong growth of certain business sectors. For example, urbanization has been steadily increasing for some time and is expected to grow by another 40% by 2030, which should enable Nexans to meet new needs and increase its order book. Population growth, estimated at over 20% for the same period, should also benefit the Group's sales.

Analysts specializing in this market also highlight the quality of the Group's recently implemented strategy, entitled Nexans Brings Energy to Life. This strategy is based on an offer divided into four main sectors. First, there is energy infrastructure and date, then renewable and fossil resources, transportation and finally construction. The diversity of these sectors of activity also helps Nexans to protect itself against the risk associated with a single type of activity.

The Group's management has also recently decided to refocus its activities on more profitable products such as special cables and on certain growth sectors such as energy cables. As a result of these two important changes, the Group has posted an operating margin that has increased in recent years, despite the decline in the oil and gas markets.

To conclude with the advantages of the Nexans group and its share on the stock market, let's not forget that the financial situation of the company has been strongly reinforced following the increase of the group's capital, which reassures investors and shareholders.

Negative factors for Nexans shares
The factors in favour of a drop in the Nexans share price:

First of all, the cost of certain raw materials essential to the group's production must be taken into account. This is the case, for example, with the price of copper and currencies, which naturally influence the group's profitability, with a rather erratic evolution for some time.

The Group has also encountered certain problems in recent years with regard to the production of certain ranges of cables. This is particularly the case with the flexibility of the submarine cable production tool, which is causing problems for the Group. This is also the case for the land cable division, which is having difficulty adapting to the growing competition from Asia.

Other important risks must also be taken into account before assessing Nexans' profitability. For example, we know that the company's activities are closely linked to oil prices, which have been declining significantly in recent years. Nexans' activities are also highly exposed to geopolitical risk, which has led to high impairments and a significant net loss in 2015 in some specific markets such as the Brazilian market, the Australian market or the Russian market.

With oil and gas customers currently experiencing a decline in business, this represents a significant loss of revenue for Nexans, which has seen its annual revenues fall drastically since 2016.

It is also regrettable that the group has a very weak presence in the very specific but fast-growing field of telecommunication cables. This target represents only 5% of the group's sales, although it generates the highest margin.

Finally, investors and shareholders also deplore the fact that Nexans' management no longer communicates any numerical objectives for the current financial years, which makes visibility less good and the implementation of strategies based on results and objectives more complex.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

When were Nexans shares listed on the stock market?

The Nexans Group was listed on the stock exchange in 2001. More precisely, its listing was made possible after the group changed its name in 2000, becoming Nexans after being called Alcatel Cables and Components. The listing of this stock will be done on the French stock exchange, Euronext Paris, but also on the SBF 120 stock index. Today, the company's shares are still listed continuously and directly on the Euronext Paris market under the acronym NEX.

What is the current market capitalization of the Nexans Group?

Currently, the Nexans Group has a market capitalization of approximately 1,269 million euros. This is the last update of this capitalization in 2020. Among the most important figures, we can also mention that Nexans' sales for the 2019 financial year were 4,409 million euros and that its net profit recorded in the same period was 14 million euros.

Is Nexans part of the French CAC 40 index?

Nexans shares are not listed on the French benchmark CAC 40 index, but on the SBF120 stock market index, which is another French stock market index calculated from the prices of the 40 CAC 40 stocks and the 80 most liquid first and second market stocks listed among the 200 largest market capitalizations in the French market. SBF stands for "Société des Bourses Françaises".

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