Nexans Aktie

Welcome to the Nexans Half Year 2026 Earnings Call. [Operator Instructions] Now I will hand the conference over to the speakers, Julien Hueber, CEO; and Vincent Piquet, CFO. Please go ahead.

Good morning, everyone, and thank you for joining us today for Nexans' First Half 2026 Results Call. I'm here today with Vincent Piquet, our CFO, and together, we'll take you through our H1 2026 performance. As usual, our disclaimer noting that this presentation contains forward-looking statements subject to the usual risks and uncertainties.

Slide 3. So let me show you through the key highlights of our first half 2026 performance. Nexans delivered once again its strategy of profitable growth and further increased its exposure to the U.S. market. Starting with group performance. Standard sales reached EUR 3.2 billion, up by 1.5% organically, driven by a strong Electrification performance with organic growth up by 4.5%, more than offsetting the expected decline in other activities linked to metallurgy.

The group delivered a solid adjusted EBITDA amounting by EUR 388 million, representing a healthy margin of 11.9% of standard sales, also driven by our Electrification business, which delivered a robust adjusted EBITDA margin of 13.2%. Let me highlight once again that this is a high level of margin supported by our positioning as a Pure Player Electrification bearing fruits. On cash generation, our cash conversion ratio stood at 42.7%, underlying the quality of our earnings.

Turning to capital efficiency. The group ROCE stood at 15% in H1 2026 and Electrification ROCE was at 17.4%. The variation compared to last year was mainly explained by the goodwill added through our recent acquisition, notably Republic Wire in the U.S. With the completion of the acquisition of Republic Wire, Nexans further expand its North American footprint with now close to EUR 1 billion of current sales, and that is a platform to further continue the buy-and-build story in the U.S., but not only in the U.S. as we also remain opportunistic in our M&A pipeline.

We also recently completed the divestment of Autoelectric on July 3, marking the successful completion of our transformation into a full-fledged Electrification Pure Player. Finally, on our H1 2026 on operations, our transmission MI line will be loaded until mid-2028 with a project of interconnection in the Mediterranean Sea that should start by the end of '26, reflecting sustained strong demand for cutting-edge high-voltage solutions leveraging our leading technological capabilities and engineering expertise.

Electra, our third cable-laying vessel successfully enter into operation starting, as you know, in June 2026, further strengthening our fully integrated installation capabilities. I also would like to highlight on PWR-Grid that we expect our capacity in Europe to increase by around 40% between 2025 and 2028 to answer a buoyant market where demand still materially exceeds supply. These investments are part of our 28 guidance announced in '24. And again, the amount of work to be done in PWR-Grid worldwide is massive. The significant extension of duration of frame agreements with our customers -- our platinum customer is the best illustration of this.

Moving to next slide. So before we deep dive in our segment performance, I really wanted to insist on a structural transformation that is reshaping our industry and creating unprecedented opportunities. This slide capture why our pure player model is so powerful. We are witnessing the emergence of a new market paradigm fundamentally reshaping our industry. Our customers are rapidly changing the way they work, and this is opening the door to entirely new type of partnership, new channel to market and new business opportunities.

This SHIFT is particularly pronounced in fast-growing verticals such as data center, battery energy storage system and solar, where Electrification needs are surging and where being close to the end customer is becoming a real competitive advantage. This is exactly why our pure player positioning makes Nexans a preferred partner worldwide, thanks to our agility and strategy on 3 pillars. First, innovation. Our R&D center is dedicated to addressing the critical needs of end users and decision-makers directly, giving us a direct line into how these fast evolving markets are shaping the requirements and help us design solutions ahead of the curve rather than reacting to them.

Second, industrial excellence. By mutualizing our industrial footprint across the group, we are structurally improving our time to market. And you know that this topic is important for me. And with our ongoing capacity expansion, we are positioning ourselves to capture a substantial share of demand growth.

Third, M&A. We continue to consolidate our positioning across Electrification and the momentum speaks for itself. Three acquisitions in 12 months, we ramp up of their capacity expansion. You remember, we explained that RCT is increasing capacity as well as Republic Wire. We intend to keep pursuing external growth with a disciplined approach to further strengthen our Electrification activities.

Put together, these 3 pillars are precisely what allow us to address our customer critical needs for reliable, efficient and sustainable solution with a speed to market that is essential to winning contract in this new paradigm. This is a full strength of Nexans pure player model.

Moving to Slide 7, our H1 summary. So let me break down our H1 2026 performance between Electrification and other activities. Electrification remains a clear engine of our performance in H1 with organic growth of plus 4.5% in the upper range of our midterm guidance. The group adjusted EBITDA margin reached 11.9% of standard sales, flat versus 2025 margin per but slightly below compared to H1 '25. H1 2026 remained constrained by an adverse mix effect among the 3 segments of Electrification with a strong performance of Transmission, PWR-Transmission, PWR-Grid staying at a high level, while PWR-Connect still facing a mixed effect.

Finally, on other activities, mainly metallurgy, the segment witnesses a minus 15% organic decline. And as you know, this is due to the strong comparison basis in H1 '25 as customers brought forward copper orders ahead of tariff implementation in the U.S.

Moving to Slide 8. Let's walk through business by business and starting with PWR-Transmission, which delivered a strong improvement in adjusted EBITDA margin in H1 2026. Here, also I'm very happy to announce that our MI line will be loaded up to mid-2028 with a project in the Mediterranean Sea. This project will start to contribute our performance by the end of this year. Standard sales came in at EUR 777 million, up by 4%, which includes the growth of minus 0.1% organic growth as expected as we are lapping an exceptional comparison base after 2 consecutive years of a strong momentum and the growth pattern is now starting its normalization throughout the year with comparison basis that will become even higher in Q4, while margin improvements will continue on the trajectory.

Adjusted EBITDA reached EUR 107 million, up by a strong 21% year-on-year with a margin up almost 200 basis points to 13.7% of standard sales. This confirms our strong operating leverage and that we are firmly on track towards our high teens margin trajectory by 2028. Our adjusted backlog stood at EUR 7.7 billion at the end of June, essentially flat versus December. The backlog remains subsea-driven and give us good visibility into our activity all the way to 2028. And as you know, our MI line, in particular, being now loaded until mid-'28.

Moving to Slide 9 on Nexans Electra. As you know, our third cable laying vessel has successfully entered into operation in June this year 2026. Electra brings a real step-up in capabilities with a 3 turntables to a total cable capacity of 13,000 tons, which is up by 35% versus our Aurora vessels with the ability to lay up to 4 cable at the same time. Beyond the technical specification, what matters the most is what this vessel give us strategically, greater efficiency, lower energy consumption and above all, additional agility. Indeed, owning our own vessel means we control our execution capacity directly rather than depending on the charter market, which directly supports future profitable growth in PWR-Transmission.

Moving to Slide 10. Let's move to PWR-Grid, where Nexans continued to build on its strong positioning in the buoyant global market. First, the standard sales reached EUR 702 million, which is up by 3.7%, including a solid 4.9% of organic growth in the range of our midterm targets. This was supported by strong underlying trends on the accessories business that remains particularly dynamic. All this driven by robust customer demand for high value-added solution linked to grid modernization and the ongoing expansion of power infrastructure.

The adjusted EBITDA came in at EUR 108 million with a high margin of 15.4% of standard sales. This level is fully in line with our expectation. It's worth recalling the structural mix of this business. Around 2/3 is underpinned by frame agreements and the remaining 1/3 by project activity. Given the timing and execution profile of this project, some quarter-to-quarter margin can variate simply by a mechanical consequence of that mix. Overall, buoyant demand combined by a strong positioning in high value-added solutions continue to support pricing power.

We are also seeing a strong momentum in North America in infrastructure project and data center. And Nexans is actively preparing to capture this business, and that has started in H1.

Let me also touch briefly on inflation context. As we've explained before, we saw a slight lag effect in the early stage of the conflict, which was quite minimal and is now behind us. All our price are now fully indexed to the current price situation, and we passed inflation through to customers. So at this stage, we do not expect any further significant impact on the pass-through. That said, we remain cautious and continue to closely monitor the situation, both in the Middle East and at the macro level. And finally, a key point in that global demand is now significantly outpacing available industry capacity, which is why we're investing to expand our own capacity.

On the next slide, Slide 11, illustrates just how attractive the market perspective are worldwide. I want to highlight 2 figures that really capture the scale of the opportunity. First, around 80 million of kilometers of cable will need to be built or replaced by 2040. This is the equivalent of rebuilding today's entire grid over the next 15 years. And second, close to 50% of the world PWR-Grid will not be fit for purpose to handle this renewable energy by 2030. So these needs are driven by structural force, modernization of aging grid, the rising share of renewable energy in the electrical mix, the need for greater grid capacity, and the growing importance of grid reliability.

The reality today is that capacity is saturated globally and notably in Europe with demand materially exceeding supply. This is precisely why we are investing to expand our PWR-Grid capacity in Europe by around 40% between 2025 and 2028. These investments were included in our '28 guidance we presented at our Capital Market Day in November '24. We are simply executing on the plan we laid out to capture a demand environment that remains exceptionally strong and probably even stronger than expected at the time of our Capital Market Day last November '24.

Let's go to Slide 12, PWR-Connect. So the business review with -- let's finish with the business review with PWR-Connect, which showed very dynamic top line momentum with a resilient margin performance despite an adverse mix effect. First, on standard sales. They reached nearly EUR 1.4 billion, up by 15.4% in total. This breaks down into 7.3% organic growth, an exceptional high level, which supported a very dynamic trend in Latin America and several European countries, including growth from Italy, which illustrates our ability to proactively deploy our innovative solution in that market.

On top of this acquisition -- recent acquisition added a 10% sales growth, reflecting the contribution of 5 months of Cables RCT in Spain, 6 months of Electro Cables in Canada and 1 month of Republic Wire in the U.S., 3 value-creative deals. Second, on profitability, our adjusted EBITDA came at EUR 162 million, representing a margin of 11.8% standard sales. As expected, this segment remains subject to a temporary adverse mix effect driven by 2 factors: The Nordic countries where our best-in-class operations are still constrained by market conditions and Italy where margins are still below the segment average. But the key message here is the sequential improvement.

If you look the progression from H2 2025, our margin improved by 80 basis points from 11% in H2 '25 to 11.8% now in H1 '26. This was supported by synergies in Italy, improvement in Latin America and the continued expansion in high-value verticals such as data center across our different geographies. So the trend is moving in the right direction. And despite the mixed effect, we see our efforts bearing fruits. A quick word on inflation. As we discussed for Grid, the dynamic is similar here for Connect.

With that, I will now hand over to Vincent, who will take you through the financial review.

Thank you, Julien, and good morning, everyone. Let me start with the standard sales bridge, which walks you from the EUR 3,093 million in H1 2025 to EUR 3,249 million in H1 2026, representing a total sales growth of plus 5%. Organic growth is at plus 1.5%. As Julien mentioned, this reflects a solid Electrification performance, up 4.5% organically, partly offset by the expected decline in other activities linked to metallurgy down 15.6%, and that should mechanically recover in H2 2026.

The second and largest contributor was scope at 3.8%. This is where our value-accretive acquisitions are really starting to bear fruit. It includes 6 months of Electro Cables, 5 months of Cables RCT and 1 month of Republic Wire, which we consolidated from June 1. On Republic Wire specifically, we'll have a 7 months contribution over the full year 2026. So you will see this Scope effect continue in the second half.

I would also like to say a word on Republic Wire as its integration is off to a very good start. We are progressively bringing in our know-how, our culture of operational and industrial excellence, and we're already working on generating the first synergies. Finally, foreign exchange had a slightly negative impact of negative 0.3%. The U.S. dollar and the Canadian dollar weighted on our sales, though this was partly offset by the appreciation of the Norwegian krone. This brings us to EUR 3,249 million in standard sales in H1 2026.

Let me now turn to how this translated into profitability with the adjusted EBITDA bridge. The bridge takes us from EUR 372 million in H1 2025 restated for IFRS 5 to EUR 388 million in H1 2026, an increase of 4.3%. Looking at the organic contribution by segment, growth was primarily driven by the strong performance of PWR-Transmission, which added EUR 16 million and was clearly the main engine of our profitability improvement this half year, thanks to the quality of execution and driving the strong operating leverage.

PWR-Grid contributed a further EUR 2 million. Here, I'd note that unlike in some prior periods, there were no particular one-offs projects this half, but we remain at a very high level of margin, among the best-in-class performers, and we will continue to grow our margins gradually from here. Please keep in mind also the structure of the business, as reminded by Julien, 2/3 with long-term frame agreements and 1/3 with projects.

PWR-Connect added EUR 3 million, including organic and scope. We have deliberately combined organic growth and scope effects as we increasingly optimize production flows between our existing and recently acquired plants whenever it makes strategic sense. This reflects our industrial mutualization strategy and our ability to adapt to the new market paradigm as previously highlighted by Julien. And we will keep mutualizing our plants to optimize our production capacity, improve our time to market and capture commercial opportunities. We're confident in our ability to extract value from this transformation of our footprint utilization and the benefits will progressively on time be fully reflected in our figures.

On scope, acquisitions contributed around EUR 20 million, composed of 6 months of Electro Cables, 5 months of Cables RCT and 1 month of Republic Wire. Foreign exchange accounted for minus EUR 3 million and other activities weighted by a further EUR 2 million. All this brings us to a solid adjusted EBITDA of EUR 388 million for the first half.

Let's now go through the P&L. Starting with our adjusted EBITDA that grew at plus 4.3%, as explained, with strong contribution for PWR-Transmission. We then have the impact of depreciation, mainly linked to PWR-Transmission recent strategic CapEx as well as the acquisitions. Positive Corex, mechanical effects of copper price increase over the period, offset by negative ForEx impact related to our hedging activities. Our income taxes remained broadly stable at circa EUR 60 million in H1 2026 compared to circa EUR 65 million in H1 2025, resulting in an effective tax rate of 32.7% in H1 2026, more or less in line with the full year 2025 rate that was at nearly 31%.

Net income from discontinued operations decreased by EUR 17 million, reflecting the net losses generated by Autoelectric during the first half 2026, while H1 2025 benefited from the net gains on the disposals of Amercable and Lynxeo, partly offset by an impairment related to Autoelectric at the time.

Let me now walk you through the net bridge for the first half -- net debt bridge, sorry, for the first half. The first item to highlight is the positive operational performance in EBITDA and working capital. On capital expenditures, spending was relatively high this half, mainly driven by the investment in Nexans Electra. And I want to flag here that H2 CapEx should be more or less in the same range as in H1 as we continue to finish the investment in transmission and metallurgy. This brings me to our free cash flow, which came in at EUR 165 million, representing a cash conversion ratio of 42.7%. Without transmission down payments this half, this is a solid performance, illustrating our discipline on cash management.

On dividends and equity operations, the cash out was lower than last year because last year, we ran the successful ACT employee shareholding plan. Again, at Nexans, we believe it is important to associate our employees with the group's performance and long-term value creation. On M&A, this includes the acquisition of Republic Wire together with the earn-out and the transaction fees associated with that transaction.

Putting it all together, we end the half year at a well-controlled leverage ratio of 1.4x. It gives us ample headroom to continue investing in our growth, both organically and through M&A.

Let me finish the financial review with a word on our financial structure, which remains solid even after the acquisition of Republic Wire, giving us the flexibility we continue to -- we need to continue executing our investment plans. Our liquidity position remains very strong at around EUR 2.5 billion, including EUR 1.5 billion of cash and cash equivalents alongside our undrawn EUR 800 million revolving credit facility and EUR 250 million of undrawn EIB financing. In the context of the Republic Wire acquisition, we put in place a bridge to bond term loan of EUR 500 million with an initial 12 months maturity and two 6-month extension options. This is a temporary instrument indexed to Euribor that partially finances the acquisition while we prepare a bond issuance.

Setting aside that bridge, 100% of our debt is at fixed rate and our nearest maturity is our EUR 200 million EIB financing due in April 2027. Our average cost of debt stands at around 4.1%, which is a very good level. Finally, on our credit rating, we remain BB+ with a stable outlook from S&P. This rating reflects the strength of our balance sheet and the discipline we apply in deploying our capital. With that, our leverage at 1.4x and its robust financial structure leaves us well positioned to keep investing in our growth.

Let me now hand back to Julien.

Thank you, Vincent. So let me take you through now our 2026 guidance. So we expect an adjusted EBITDA for full year of 2026 to be between EUR 770 million and EUR 840 million and the free cash flow to range between EUR 235 million and EUR 325 million. So this guidance does not assume execution of the Great Sea Interconnector project in '26, as you know, but includes the load of the MI line at the end of 2026. This guidance takes into account the contribution of Republic Wire, the new acquisition in the U.S. starting from 1st of June '26 and excludes the contribution of any further acquisition.

So all in all, the opportunities ahead are compelling, and we have all the capabilities to succeed as a pure player in Electrification. We'll continue to execute with discipline strengthening operational excellence and further leveraging our integrated industrial footprint. This transformation will be gradual, and we are confident in our ability to deliver sustainable value for our stakeholders. Nexans will continue to operate within a disciplined financial framework for benefit of its shareholders, employees and the broader economy.

So with that, thank you all for your attention. And now with Vincent, we will be happy to take your questions.

[Operator Instructions]

The next question comes from Akash Gupta from JPMorgan.

I got 2, and I'll ask one at a time. My first one is on guidance. Previously, you said that you expect H1 to be softer, meaning H2 to be stronger. And given the H1 performance that shows year-on-year growth in EBITDA. My first question is that, does this comment still hold, i.e., should we expect a better H2 on an underlying basis before adding 6 months contribution from Republic Wire acquisition?

Okay. Thank you, Akash, for your first question. So yes, indeed, you've seen that we have raised our guidance by EUR 40 million, that is the low end of the guidance. A few things. First one, you have seen that our H1 is more dynamic than our initial hypothesis in terms of phasing of project, in terms of growth specifically in some area like Connect or Grid. We are very confident for second half backlog also. The backlog are both in Grid and Connect are very strong. So we see also a good H2. But we are -- as you know, we are living in a geopolitical environment with Iran that is when they're in, when they're out. We want to remain prudent overall. And clearly, we are not shooting for the end of the guidance. We are shooting for the midpoint of the guidance. So -- but clearly, we are very satisfied with our H1, which was stronger than our initial hypothesis.

And my second question is for Vincent. I think when I look at the D&A expense in first half, it was EUR 153 million with just 1 month of Republic Wire consolidation. If we double this amount and add a few million more for Republic extra D&A, should we expect full year D&A to be around EUR 310 million? Or is there any one-off in H1 that we shouldn't expect to be repeated it in full year?

Yes, you're right. Our H1 was the same level as H2 last year, and we expect due to specific items, our H2 2026 to come back to levels that are more in line with what we saw in H1 2025. So there will be a slowdown in H2 2026 versus H1 2026 on the depreciation rate.

The next question comes from Daniela Costa from Goldman Sachs.

I have one clarification on the answer just before, and then I'll ask my question. But just on the guidance on the sort of EUR 30 million to EUR 40 million of the change in the range, is that just Republic? Or is there anything else in it? Because I think if we look at the multiples you set for Republic, it seems like this is just Republic. Can you just clarify if there's anything else in the guidance change beyond Republic?

No, it is more than Republic. So we've included the impact of Republic, and there is more than Republic in that EUR 40 million that reflects the strong performance of H1 and the positive outlook we have on H2.

Okay. Got it. And then just looking at the backlog you had in March was EUR 7.9 billion. Now you have EUR 7.7 billion. If we look at sort of like the sales you had during the quarter, that implies that you got some orders at around EUR 235 million. Is that the Mediterranean order or the Mediterranean order comes over and above that? And maybe just helping us understand how that then fills up the gap of GSI because if it is just a EUR 235 million, sounds like a much lower value than what one would have expected GSI to be in '26 and '27 and mid-'28.

Okay. So I will take this one, Daniela. So the backlog we have reporting end of June does not integrate the new MI order that we are adding with the Mediterranean Sea. So it does not include it yet. We have been winning some projects. You remember that we explained in H1 that we were winning some projects in order to progressively use the MI line, do MI, and we win also some medium-sized projects in the transmission. So that's explaining the EUR 7.7 billion of backlog. Regarding this MI project, we are now the preferred bidder, and we are in exclusive discussion with our customers. And as soon as the regulatory process will be finalized, it will be an official award and then it will become in the backlog. It's not yet in the backlog. In terms of size, it's using -- I'm sorry Daniela, in terms of size was your second question. It's using our capacity for 18 months. So it gives you an idea of the size of the order.

The next question comes from Scott Humphreys from Berenberg.

Firstly, on Connect. So we saw some quite exceptional growth, organic growth in Connect in Q2. margins, as you say, were up some 80 basis points from H2 '25. Could you talk a bit about the different components of this sequential improvement in the Connect margin? And I'm thinking specifically as well about the sort of the margin differential between the Nordics and Southern Europe in particular and the extent to which that gap could close?

Okay. So Connect, so indeed, the geographies dynamic are different. We have explained already, if you remember, in Q1 that the Nordic market was sluggish. In fact, it has not restarted, which is for us, our biggest margin level for Connect. It's several points above the margin several points mean it's more than 5 to 6 points above the margin of Connect in the average. We are doing some growth. So Nordics is not growing, not yet. We estimate and we hope that it will recover progressively in H2, but in H1 it has not recovered.

But at the same time, we have seen some other European countries going quite well. Italy, very strong growth with our Italian business we have there, pushing for innovation. So margins are approaching step by step, but the margin in Italy, as you know, are not yet at the average. So when we are pushing on getting more volume, extra activities for the Italian market, it has a negative mix impact on our margin.

France is doing very well. Belgium is doing very well. Spain is doing very well. So we are extremely satisfied with the market recovery in this part of the world. We also have good dynamic sales in South America, extremely strong in South America as well as in North America coming up. So overall, our topics we need to solve and it's ongoing is really the Nordics that's hurting us and quickly continue to transform the business we have in new acquisitions to bring them typically Italy to bring them to the at least average of Nexans for Connect.

Great. And if I can just ask a second as well. So on the MI production line, it sounds like you've got this long-term project sort of starting by the end of 2026. When we think about your 2026 guidance on H2, could you kind of confirm what that assumes in terms of maybe some of the shorter-term actions that you were talking about previously? Has anything changed in relation to those sort of smaller pieces of work and utilizing the line this year?

No, I think it doesn't change. We're preparing for the start of production towards the end of the year. And in the meantime, we're continuing to use the line with very short orders, the spares that we've talked about before. So it doesn't change. We now have certainty that the line will be full used starting at the end of the year for -- until mid-2028.

The next question comes from Nabil Najeeb from Deutsche Bank.

Just a follow-up on Connect. Obviously, a solid organic improvement in the quarter for Connect. Just wondering to what extent, if at all, demand was helped by extreme weather conditions, particularly as Europe experiences multiple heat waves and which, yes, we have seen that has supported HVAC demand for some. And if it did help, do you expect that to remain a tailwind into Q3?

So we do not see the demand has been positively impacted by the heat wave. We do not see that because we are -- the heat wave -- we might say the opposite because it could have slowed down some of the construction works outside during the day. So it didn't have any positive effect for us. It's really the fundamental market that is driving this growth. Commercial is picking up, industrial activity is picking up, of course, data center, but also battery storage and all this. So we also are quite satisfied on the solar. In solar, it's either grid and connect depending on the type of cable, medium voltage bringing the solar panel to the grid, but also we have ample of connect business in solar. So it's a mix of several elements. And we do see a continuation of a good momentum in the growth in the second half of the year.

Great. And my second question is on Republic Wire. Could you give us an update on the progress on the capacity build-out there and the progress made with increasing medium voltage sales in the U.S. using Republic Wire as a base?

So I was in Republic 3 weeks ago, I spent the time to meet, first of all, all the sales network, sales agents. I was very impressed by the quality, by the, I would say, the amount of sales guys across all states in the U.S. in the right location, California, Texas, Michigan, Florida and so on, pushing on selling our product there. So that's -- I was very impressed by the quality of the sales agents. So the integration is doing very well.

We already have started the industrial synergies between our Fergus plant in Toronto and the Republic on different elements, compounds metallurgy. So the plants are supporting each other. So that has started from day 1. It's the actions. It's also very -- I'm very enthusiastic about the capability to extend our Nexans portfolio product to these Republic Wire sales agents willing to extend their range of portfolio. So that's also moving very fast at the right pace. We have already in place a very strong integration teams on site in order to review all the different stream we have. So it's cadenced weekly reviews and so on. So that's moving fast as well.

Now regarding your question about LV. LV Expansion in the U.S. for the time being, at this day, we are doing it from the outside U.S. plant, so Canada and South America, as we have explained. And we are currently investigating different option of medium voltage capacity increasing for North America. But clearly, we will increase our capacity to sell more medium voltage in the U.S., either from the internal manufacturing or from the outside, but we are currently working on 2 options.

The next question comes from Lucas Ferhani from Jefferies.

The first one is just on transmission. How should we think about kind of the growth in the coming years? You're not adding any more capacity. I think you have the vessels now. You're adding a little bit in high voltage kind of onshore, but how do you see the growth? Is it mostly a margin story? Or is there more to get on the top line as well from here?

Yes, I can start. So as we've said before, clearly, transmission is in transition. After 2, 3 years where the business doubled, we are going to see much lower growth rates going forward. And it's also dependent on the timing and the lumpiness of the projects in the backlog and their execution. So what you saw in H1 will probably continue in H2, and that's what we see. It doesn't have an impact importantly and to your point on the profitability expansion rate. The backlog is very healthy and very -- the execution is doing very, very well right now. So we're on track for the EBITDA expansion -- the EBITDA rate expansion.

I think maybe I will add one thing. Clearly, our focus today is profitability of transmission. This is clearly our main focus. You know where we want to land by 2028. We are on track. There's a trajectory. There's an action plan. It's about execution. This is where we push the team to focus on the H1 results demonstrate the capital team to deliver, but there's still a long way to go, and we are confident that the action ongoing will deliver results in H2 2026 and in 2027. So trajectory is there. The plan is there. We are pushing the team to execute on profitability.

Very clear. And then the second one was just on the -- on M&A, just the cadence of kind of potential further deals. I guess this leverage has gone up a little bit in the first half, but you're deleveraging. Do you want to wait to kind of further integrate Republic Wire? Or if you see opportunities, are you happy to kind of already start to do further deals? How do you think about the cadence of M&A?

Well, our strategy is profitable growth. The profitable growth strategy is based on expansion, both organic and inorganic. So part of our strategy is to do M&A, and we will continue to push to discuss targets to execute this M&A. So we will not wait any time any opportunity which sounds good to us in line with our strategy, we will action that.

The next question comes from Sean McLoughlin from HSBC.

Just coming back to the Connect margin mix. What kind of time line should we expect to bring the LTC margins to the Connect average? Or is this just a structurally lower margin business compared to Nordics? Just thinking about how that margin mix evolve through the second half and the 80 bps that you mentioned, is this the kind of level that we should expect in terms of year-on-year improvement? Or what other moving parts should we consider there?

So when we have done the acquisition of LTC, the challenge on the strategy on that acquisition was to purchase -- to buy this acquisition at a low multiple, if I remember, it was around a 5 multiple. And of course, when you buy a low multiple, you get a lower margin at start. So all our challenge and all our strategy is to transform this low-margin business to a high-margin business. And this is what the team has been executing since now 2 years, it generate results.

So we are, first of all, we have reduced the number of customers. We have done the SHIFT methods on these activities that a big part of it has been done. We have reallocated the capacity to the best verticals what we believe. And most important, we have injected innovations to the business, both to Italian operation to Italian business, but as well other country business because this is not only Italy, it's also covering other geographies. So the plan is there. The plan delivered according to exactly what we expect.

We are still below the average, but we're making progress on our expectation for the second half on the years to come is not to be at 11.8% connect. We believe we can be above 12% and step-by-step raising this bar. So that will come from transforming some of this acquisition, but also acquiring different [indiscernible] in different geographies. And third, by developing ourselves to verticals which are providing -- that are having more appetite for innovations such as data centers, BESS, battery storage and so on.

So the plan is -- we have a plan for LTC. It's moving in the right direction. It takes time because there's a big demand. And of course, when you have a nice industrial footprint, you want to use this capacity, which is what we are doing. So the growth of LTC is extremely dynamic in this first half. We will continue. It will remain dynamic in the second half, and we need to quickly inject more and more innovations to raise this margin level.

And the second question, just coming back to the guidance that includes the MI line loading by end of '26. So are we -- is the base assumption that you will secure more short-term work? Or are you already baking in this larger project win by end of '26 in that guidance?

Yes. We're baking in a small portion of that new project into the number at the end of the year. So we're working on that. And in the meantime, if we have the ability to continue to execute on the spare orders that I mentioned, we will do that. So yes, there's some of it in.

The next question comes from Chris Leonard from UBS.

Maybe 2 for me, actually. Could I start by going back to the Nordic region, and you mentioned that you hope to see that sort of recovery coming through in the second half. Has there been any signs of any sort of recovery in growth in early Q3 to date? And what would you -- which geographies in particular, would you be looking for to see an early recovery?

Well, first of all, Q3 in the Nordics is better in terms of volume than the Q1 this year, clearly. But the last several semesters, we had typically the Swedish business has been going down quite a lot in our mix, but also in top line sales because of the local economy. So we are not the only one facing this problem. So we do see some start of recovery in Q3. For us, our ambition is to go faster than that because we expect them to grow even faster. And this is, by the way, both in Grid and Connect because we are selling also Connect on Grid business to some of our distributors there. So -- but the recovery is coming, but it's still not at the level we expect.

And second question on Transmission maybe. I mean you spoke about this new contract you're hoping to get in that would keep the MI line occupied for maybe 18 months. And I think previously, you stated maybe you're also seeing other inquiries for transmission on the MI line. And what sort of time frame might you expect for those discussions to get more mature? And if you were to confirm additional contracts for the MI line, would those take priority for delivery ahead of the current GSI contract?

Yes. So we're actively working on different projects. There's clearly appetite for projects using this technology specifically. As we've mentioned before, there's only 2 actors in the world who actually can produce this MI technology, and the demand is strong because it's a requirement in many geographies Specifically Mediterranean, but not only. And the time line of -- and the sequencing of these projects is both our competitors and us, we are basically coming towards the end of the backlog that we have visibility at '28, '29. And so it's normal for the activity to start to pick up in '27 so that we start to refill the backlog and the projects will be executed in '29, '30 and beyond. So it's probably during the course of next year that some of these projects will materialize.

I just want also to highlight the strong agility of the transmission team in Nexans that managed to basically reposition this production MI line to this new project. You can imagine that in this world of transmission, you normally have long cycle of projects. When we understood that the GSI was postponed to a different date, it was not so long ago. It was more or less 6 months ago and the beginning of the year. And the team has done a great job to quickly find out in the market talking to customers. And you explained that customer was eager to also use this capacity to make it happen in 6 months' time. So I think this is quite impressive in terms of cycle time. And it gives -- it only shows the agility that the team has been doing. So I think that's something to highlight.

And one complement for me, sorry, Chris, to answer specifically your question. As we've just done with this new deal, if GSI doesn't move fast enough and we find another deal, then we will do that other deal before GSI.

The next question comes from Akash Gupta from JPMorgan.

It's just on transmission business. When I look at various moving parts, I mean, I think MI was the last piece of bottleneck you had in saturation of your production, capacity, but you do have some installation offsets, including the new vessel. So the question is that like when we look at all of your production and installation assets in transmission business, by when should we expect you would be fully saturated on that? Is it by end of the year when you start executing on this new MI project? Or do we need to wait for a few months until you have produced the cable and you start installing it? So just curious, when should we be in 100% utilization of your -- all of your assets in transmission?

So it's -- we've got different plants in the world. So I would say the answer would differ from one plant to another. We are still, at this moment, building capacity in Charleroi land high-voltage. This capacity will be up and running by end of the year, not before. So -- and of course, the consequences on the saturation of equipment will differ from each of these.

So overall, we are well loaded until 2028. Charleston and Halden submarine plants are loaded. And to improve also our profitability, we also -- the team is also improving the industrial efficiencies and that also creates some capacity availability that maybe we didn't have a few years ago. And that gives me the willingness to also go after other smaller size deal. So in the industrial world, I mean, our job is to keep on improving, working on the efficiency, execution, selectivity of our project.

But -- so I think that overall, our equipment is well loaded, but the improvement in the industry give us also still some room to keep on developing extra sales in '27 and '28 and the year after. And for the case of Charleroi, Charleroi is we just have this new equipment. It will be loaded for the big TenneT project that we will be starting some of it already started. That will load our plants in terms of land high voltage. But we keep pushing because industrially speaking, we need to keep on improving our efficiency, the speed of line to capture extra miles of capacity.

[Operator Instructions]

The next question comes from Scott Humphreys from Berenberg.

Apologies. A couple of other companies with exposure to the solar space have reported recently, and they've seen some pretty strong growth in that market. Could you please provide a bit of color on the scale of solar within Grid and Connect and the extent to which sort of these are current dynamics due to the energy markets, government incentives that are sort of driving this segment versus a structural longer-term trend?

It's a very interesting question because it's a vertical one of our strategical verticals we really want to go in. It's extremely dynamic perspective in terms of growth looking forward. It's very much active in South America, where we are currently producing, building and selling large solar projects. The same for Mediterranean Sea countries like Morocco on the south of, I would say, of Europe. So there is plenty of activity that I should mention Australia as well. And by the way, because we also are currently producing for larger activities.

So the long-term perspective are extremely dynamic. It is part of the growth we are having both in Connect and Grid, as I explained previously, we do produce the low-voltage cable for solar that are between 2 panels, solar panels, but we are also, of course, producing medium voltage to link this solar farm to the grid. So the 2 market segments, Grid and Connect benefiting from this dynamic. It's already a significant part of Nexans sales growth, and it will continue because we are innovations, capabilities, different type of packaging that fit completely with this market.

[Operator Instructions]

Okay. So since there are no more questions, let me close by a few words. So the first half of 2026 was another strong demonstration of our profitable growth strategy in actions. We delivered solid Electrification growth, a resilient EBITDA margin and the cash generation, all while further increasing our exposure to the attractive U.S. market. So we completed our transformation with the divestment of Autoelectric that you know we finished by early July. Nexans is now officially a global Electrification player, a simpler, sharper and more resilient business, backed by a solid balance sheet that gives us the flexibility to keep investing in our growth.

And the perspective of us are truly exciting. We operate in markets where demand structurally outpace supply, whether in grid modernization, in subsea interconnections or fast-growing verticals like data center, battery energy storage and solar. With our innovation, our industry-leading scales and our disciplined approach to M&A, we are exceptionally well positioned to capture these opportunities and to keep creating value for all our stakeholders. I want to thank you all for joining us today. This concludes our first half '26 results call. Thank you, and see you very soon.

Ladies and gentlemen, dear shareholders, good afternoon, everyone. I'm delighted to welcome you here, and I'd like to thank you for attending this AGM. During this session, we will be commenting on the performances and highlights for the year 2025. There will be theme presentations about data centers and the digital transformation of Nexans followed by a description of Nexans' climate strategy. We also have on the agenda membership of the Board with the renewal of the terms of LAURA BERNARDELLI and ANNE LEBEL in the capacities as independent directors for a period of 4 years. We also suggest to appoint 2 new independent directors, Antonio Cammisecra and [ Thierry Furniere ] for a period of 4 years. and then will be [Audio Gap] Unify was a record year with unprecedented performances, thereby establishing Nexans' relevant vision and ambition in continuation of our dividend policy that we've had for the past 5 years. And in light of the stock performance, we suggest a dividend of EUR 2.9 per share will return to that during the session.

Now you probably found when you got here several items illustrating Nexans' a central role in the world's sustainable electrification. And you also saw our corporate film, highlighting group's contribution on a daily basis to the energy transition, digitization infrastructure security and the circular economy as well as our new brand campaign showing that Nexans is not just building cables, but actually building connections. You also saw 2 demo spaces on the group's strategic offers. First, both on our Fire Safety Solutions, showing our -- well, safety -- fire cables also as a competitive demonstration of fire propagation.

The second booth, on the data centers market showing Nexans' expertise in critical electric infrastructures that have are supporting, of course, digital development and artificial intelligence. I hope you enjoyed that. And now I declare open the AGM that is both the ordinary and extraordinary parts and to facilitate the vote on resolution and to have a quick display of results we're using an electronic voting system, a fast secure system. You've got a tablet as you got in which does include the notice of the meeting, and please return the tablets when you when you leave the room.

The universal registration document may be downloaded on our website. There's 1 version in French, and another one in English, you can also look it up, ask anyone on the staff. Just to protect the environment, we do not [indiscernible] This is a public session broadcast live and afterwards on the web. And so unless you object to this image might be shown on the website on Nexans website. So we have next to me, Anne Lebel, who is the lead independent Director who chairs the Compensation Committee and corporate governance as well as the compensation committee. Julien Hueber, who is the CEO; Vincent Piquet, who's the CFO; and Nino Cusimano, who is the Chief Legal Officer and is also in charge of development and the Secretary General of our group. And I would like to welcome members of the Board. I'd like to thank them for being here.

We also have in the room member of the executive committee, some of whom will join me later on on stage for their presentations. And I should also like to greet [ Mrs. Juliet Duco Gimo ] [indiscernible] and Ms. [indiscernible], PricewaterhouseCoopers they are both our Auditors Chair of the Board. I'd like to put together the bureau, the offices. So in line with the legal provisions, we have 2 members of the AGM with the largest number of votes and who will accept to do this. So in view of the attendance sheet with 2 shareholders representing the largest number of votes are BPI funds participations and Index as limited. We asked both the shareholders that they would accept to work as vote tellers and it is agreed to do just that.

So Bpifrance participations will have Ms. Karine Lenglart, representing BPI and for [ Invensas ] Limited, who also accepted to provide to the strategies duties there will be [indiscernible]. And so we have the officers were the bureau and of course, our Legal Officer will be the Secretary of this of this meeting, and he will be -- he is, of course, our own Secretary General. This is the first convening of the AGM, and we have a quorum with 76.21%. Well, we all need 20% of voting shares for the ordinary part of the AGM resolutions 1 to 6, so to vote plus Resolution 22. And we need a 25% quorum 25% of voting share for the extraordinary part of the AGM. And here, we are looking at Resolutions 17 and 21. And so therefore, the bureau notes that this joined AGM with more than the necessary quorum may address all the items on the agenda, both for the ordinary and the extraordinary part of the AGM. So this is how things will go.

First, we will, of course, complete legal formalities. Then there will be a show introduction video. And Julien Hueber, our CEO, will revisit the highlights of 2025. Vincent Piquet will continue with a comment on the financial performance of 2025 and of course, revenue for Q1 2026. And so will all -- this update will be followed by theme presentations first on data centers and which is a strategic growth driver for Nexans, and that will be our Elena Fedotova who's with us, artificial intelligence for performance, this will be presented by Guillaume Eymery. And then we'll have a progress report on Nexans' climate strategy. And a follow-up on new initiatives. That is just an item on the agenda that doesn't require any vote.

This will be presented by Marc Grynberg. And then an update on governance, we'll have candidates to the Board, Director candidates and compensation with Anne Lebel. Then we'll have the reports of the auditors, and then we'll have questions in the room and people online using the chat system that is being made available and then you will be able to vote on the resolutions themselves. It should be pointed out that we have not received any request for additional resolutions or indeed any other item on the agenda, neither have you received any written questions from shareholders.

And so therefore, I now give the floor to the Secretary of our AGM. Nino, you have the floor.

Thank you. So all the documents required for this AGM were made available to shareholders in keeping with legislation. You will find the various reports of the Board of Directors within the universal registration document, 25 as well as on the company's website. Let me also tell shareholders that because of new developments in regulations as of July 1 next -- the -- in terms of the modalities of invitation to census AGM will be online. So please provide your e-mail address to associate General security services, they are in charge of sending the invitations. [indiscernible] take it away.

Chairman of the Board, ladies and gentlemen, dear shareholders, they are low with the media, energy transition and electrification, but also is not just a single industry, a single market. The whole point is access to electrification, access to electricity means having a right to get treated in hospital, the first school child to be able to work in a lit classroom and for anybody to live in dignified conditions. And yet today, even though it seems obvious millions of people do not enjoy these rights and entire nations depend on other countries the electricity. And this is where Nexans steps in, not as a provider, not as a supplier, but as a guarantor of states energy sovereignty, and this is no improvisation. This is a requirement. This is a requirement for excellence in quality, in services in the provision reliability of our services when an underwater cable connect nations, we cannot go wrong because we are connected nation constantly, we have to provide low carbon technologies, improve productivity.

This means we have to invest in human skills, in production capacities and indeed in our own geographic expansion. But this also requires us to be beyond approach, both in terms of compliance, ethics, our E3 model or indeed our products in terms of the circular economy. Our ambition is worthless unless it is based on integrity. Nexans is not a mere producer or manufacturer of cables, we have built, we build bonds between nations when underwater cables connect France to Ireland. We have the Celtic part or Keltech part, doesn't just carry electricity. We are building trust. And these cables help provide independence and energy sovereignty, the 2 countries, France and Ireland.

We build resilience for our territories every distribution network being built means that we have a catchment area of jobs holding out. It means local industries remains sovereign. It means the region remains alive and we build security for families because our far resistant cables are mean fires that we can slow down. But what makes me really proud is to know the men and women building all this because at Nexans 75% of men and women work in factories. So factory is not just a me detail in our business model. It is at the very heart of value-creating strategy. And this is where we make a difference, not in meeting rooms, but in workshops, in production lines, indeed, in cable laying ships at sea.

Our teams are ready. They showed in 2025, what they were capable of doing. We have a performance that leave no doubt about the skill the expertise, the commitment of our 28,000 people. And Nexans certainly has the wherewithal to achieve its ambitions. We have a sound balance sheet. We have real investment capacities, strategic acquisitions, targeted capital expenditure. We're not announcing dreams we are performing. We are implementing a strategy and let's start in this presentation, great electrification trends withdrawing the map, our intensified program is industrial excellence as our foundation, the 3 markets, which we are bound to win, but also the highlights of '25 acquisitions contracts, proof of execution and then our ambitions to 2026, profitable growth, our expansion in the U.S. strategic CapEx.

That makes sense every figure you see means something. Every decision responds to a logic that of a builder. We are not content with delivering cables, but strand after strand, we are spreading the world's energy freedom. This is our joint ambition. Welcome to this AGM. The trend towards electrification is gaining ground. We have 4 sectors where growth is being driven. The demand for electrification and this is -- well, in the energy mix, this accounts for in France, this accounts for 27% of the mix. And by 2040, we expect more than 40% of electrification in the energy mix, and this is a global trend.

The second driver -- the second factor is hyper growth in a number of markets, especially data centers that are clean essential for electrification, but you have giga factories that will be consuming more and more electrification in the world in which we live with many crisis, not just in the Gulf and in Ukraine means that states really need to become self-sufficient. And that, of course, is future growth for us but our policy of targeted acquisitions is in line with this trend towards electrification.

Our strategy hasn't changed. If you look back at the U.S. since 2019, we started restructuring, but that makes sense to one to 2024, we started simplifying our markets focusing, of course, on electrification, we disposed of a number of assets. And by end 2024, we could start amplification. And now we're moving into intensification because -- of course, as of January 1, 2026, we've become pure players in electrification, an incontrovertible player in electrification. And so this period and this whole business stands on 4 pillars. First, commercial excellence in 2025, we worked with Nexans team on defining strategic markets. solar energy, critical buildings, data centers, and we understand that these markets displayed a higher growth rate than the rest of the market in these markets do need new technologies and are very much in line with our strategy.

The second pillar is the industrial excellence. We are industrialists. We're proud of our plants. And we will improve the competitiveness of our industrial capacity by electrifying everything so as to be able to seek out markets that require shorter time -- timing to give us an edge on the competition. And then, of course, we have to provide operational excellence in terms of, as I said, timing, agility, accuracy. And then we need to be excellent in terms of M&A because, of course, if we want to expand, we have to acquire new territories, especially in the U.S., and that means we have to show excellence not gen in acquiring assets, but also in integrating them. And so let's look at Nexans' 3 markets first, transmission that is underwater high-voltage cable.

So we are turning to future technologies, and we're looking at the quality of operations because we have an order book, that means that our -- well, the demand will be secure all the way up to 2028. The transmission people were able to double the size of operations and indeed, its industrial capacity since 2023, we moved from -- we grew from EUR 800 million to EUR 1.6 billion. And so this illustrates our ambition in the field. And then still in that business, we have a team of experts well-recognized industry with a strong reputation and that are always in a position to develop technological innovation. Indeed, there was a world backward that we communicated a couple of months ago, our ability to lay cables more than 3,000 meters deep in the Mediterranean.

The second market is the grid, and that is medium voltage. And so this is a fast-growing area. For the past couple of years, we've enjoyed both in Europe and in the U.S. and indeed in other parts of the world, -- and 1 of the highlights there, we are in a position to work with our customers to have visibility, for instance, in France with our Energy strategic client. We have a 7-year contract, enabling us to have enough visibility to invest in our factories. And so here, we're also investing in new technologies with low carbon assets in on the -- well, the green verticals, especially data centers, but I'll get back to that. Anyway, that type of hyper growth ahead of us, is -- means that we can invest in production capacities and looking at Europe between 2025 and 2028, we expect production capacity to go up 40%, likewise in other parts of the world. in particular, in Morocco. We just started a plant there, it will be commissioned as early as next year.

And then the third big market is, of course, the low-voltage parts, what we call Connect. And so we're looking at various domestic users, home cars that means more electrification in buildings. But of course, we've been working hard over the past few years, especially 2025 on what we call the fire safety technologies. And we've been pushing these products because we believe that these products do provide protection and safety for building for people in general.

Within Connect and low voltage, we have, of course, solar energy, and we'll be able to talk about that as well. And then still in the -- in Connect, we have a strong geographic expansion with external acquisitions. The last 3 acquisitions at Nexans were to do with the Connect business. We published Republic electro in Canada and RCT in Spain. These are very intensive markets in terms of business in terms of product value, and we have to be outstanding in terms of operational excellence compared with the competition. And so we're working both on the low and middle voltage for low carbon, especially aluminum-based products.

Now look at the outlook for 2026 and we were able to start on that since the year has already begun. I beg a pardon 2025, 2026. So 2025, there were 2 acquisitions, 1 midyear in Spain. -- and that is a company called RCT. The reason we decided to acquire that company had to do with the quality of their industrial capacity, the additional capacity providing -- provided by this capacity, we're up 20% on a very dynamic and buoyant market in Spain, plus excellence in terms of data centers and fire safety. So they provided the check these both boxes and that made -- meant that we had to go for that. And then we had electric cables in Canada there, again, that meant additional capacity. We're using that new capacity. But also this was a very much data center-oriented acquisition means that our industrial capacity can work in with electric cables in Canada. This means that we can gain significant market shares, not just in Canada, but in all of North America.

Now in 2025, we won a number of major contracts. I'll just cite 2 as by way of example, a major cable contract with RTE on the offshore wind turbines were EUR 1 billion worth of orders in the backlog and then another contract where we also were able to take a position. And indeed, we're very proud of this. We got the contract for the Saint-Gotthard tunnel in Switzerland using high-voltage cables in lines in the -- on the length of 60 kilometers. We also worked on product safety. We are now in a position to retrieve from our platinum customers, we can recover used cables. So we purchases on behalf of electricity. This is called cable loop. So we recovered the cables, and they are then reinjected in our furnaces in loss. And that means we can recycle used copper. And so we started this in France and we're expanding this to other countries, especially in Spain and Belgium.

And then another highlight, and that is our E3 model, the -- while expanding the model to all our plants. And the important thing for us at Nexans is to ensure that every single plant should understand what it means to protect the environment, how -- what difference they can make and how they can take -- well you have economic environment and engagement, these 3 Es are being implemented in all our teams, and that's a way of motivating our people. And by end 2025, we're able to around the Innovation Summit in Toronto, and that's -- that was our chance to promote technological products, not just for North America, but for Europe as well.

Now in 2026, and that we announced this, we acquired a leading company in the U.S. Republic Wire. So this is a beautiful company. This was created in 1982 in the state of Ohio close to Cincinnati. And they focus on low voltage cables. That's part enjoys good reputation on the U.S. market, and it will be the Nexans' largest low-voltage connect company generating EUR 500 million on a single production side. That acquisition will enable us to develop additional growth on the U.S. market in line with our strategy, and we should be able to build a connection between Republic Wire and unowned production units in Canada and South America to keep making headways on the American market.

And what we really liked about this acquisition was, of course, the quality of the industrial capacity is fully automated. It is the latest technology. We also liked their ability to take a position on all American territories with a significant network of salespeople well anchored in these territories. But also, we were able to have -- to find a place for our own products in Nexans and find synergies with Republic products to find commercial synergies, not just for data centers in the U.S. but also for manufacturing plants or even for the service sector. In the U.S., we're looking for the low voltage, we're looking at EUR 12 billion in revenue. We did have a presence, and now we do have a presence on that large market.

Now let's take a look. Let's look forward to the future will be -- there will be new developments. One thing will be, of course, our third transmission ship, we will be launching it Norway on the 18th of June. This is an outstanding ship, the largest we have built that will carry 13,000 tonnes of copper. It's heavier than the Eiffel Tower, and we'll be able to lay 4 cable simultaneously. So there will be a huge industrial device that will enable us to make a big difference on the transmission market.

The second big highlight will be, of course, to support our own industrial sovereignty by modernizing our furnaces in longs in Northern France. That will enable us to turn copper cathodes into copper wires. And -- I mean, we're looking at a EUR 90 million capital expenditure item. We'll be able to inject as much as 30% of recycled copper. And this means that we will be able to provide low carbon copper to our customers. And then, of course, the other -- 2026. I was referring to records. But in terms of well, technology transmissions, we're looking at these cables 3,000 meters deep. We're way ahead of the competition in terms of debt.

In 2026, we also landed contracts at the beginning of this year. The first 1 was a 7-year agreement with Enedis on the low and medium voltage area -- right now, we are positioning the company in the data center market. I've explained that data centers accounted for less than 1% of our activity 2 years ago. Today, they account for more than 5% of our sales. And in 2 years from now, 10%. It's a real shift for Nexans. We are positioning ourselves. We are building expertise. We are developing a marketing offer and production capabilities that will allow us to deal with this major shift in notification data centers.

We have also landed a major contract in Italy with a grid operator and also with tenants, more than EUR 1 billion for undersea transmission contract. All these contracts or this ambition for growth will only be possible if we keep investing massively into our industrial assets, which is what we do with the construction of a new plant in Morocco, in a town called [ Safi. ] It will be a showcase plant for medium voltage. It will help us keep up with the demand in Morocco, but also in Northern Africa. This plant will be launched in 2027. In France, we keep investing into fire safety cables. In the [ OTA ] site, we have finished the first phase of EUR 20 million in CapEx, we'll start the second phase of automation very soon.

Also in France, we invest into the Bourg-en-Bresse Plant with a fifth sea line for NV products following the contract that we were awarded with Enedis. Last, we also invest more than EUR 90 million in Charleroi Belgium in our ground high-voltage sites following the contract with TenneT. This will enable us to deliver growth until 2028.

In conclusion, I can say that all this ambition for this growth we generate is only possible, thanks to the brand awareness, the brand of Nexans on this market, which is why we're very proud to launch this brand awareness campaign that promotes our staff, that promotes the markets where we position ourselves and also our environmental ambitions. Thank you.

I now ask Vincent Piquet, our Chief Financial Officer, to present the financial results for FY 2025 and the sales for the Q1 2026.

Good afternoon, everybody. Thank you for attending this meeting. I'm thrilled to present the 2025 financial results. As you can see and following what Julien has explained, 2025 was a bumper year financially speaking. with the growth that the group has demonstrated plus 8.3%. We have reached sales of EUR 6.1 billion in standard sales and EUR 7.8 billion in current sales, that's considerable also at standard and current copper prices. And these sales are even stronger in organic sales. plus 11.6%. This was accretive in terms of profitability. As you can see, we have reached a historic profitability level. EUR 728 million and an adjusted EBITDA margin of 13.3%, which is very good and which is higher than the growth in sales. This is also support all this comes with -- rather with a strong cash generation. I'll come back to this in detail.

Also, the ROCE is very good above 20%. And the balance sheet is very solid as the leverage is at 0.36 in which leaves us room for investment and to roll out CapEx. This balance sheet is the result in the consequence of the actions that we took in our portfolio in 2025 with the acquisition of Electro Cable and RCT, as mentioned by Julien as well as the announcement of the sale, the disposal of Nexans auto electric, which is currently being finalized.

Let's get into the detail of all this. Let's take a group level view. You can see here the improvement in our margin very strong improvement. There have been adjustments to restate and reflect all changes in portfolio -- they are now under IFRS 5 for all discontinued operations. But if we restate all these elements, we consider very strong growth in the EBITDA and our adjusted EBITDA margin which has reached almost 12% to EUR 728 million, a very positive free cash flow, which is mainly supported by a number of down payments. So the cash conversion ratio at 47%, which is outstanding and a ROCE above 20% for the group and at 27% for electrification.

We have a very strong foundation and 2025 has been highly positive financially speaking. But let's get more granular in the different -- look at the different elements. First, growth in the top line, as I've said, high growth, organic growth over the year of 8.3%, 11.8% in the Q4. A great end of year indeed. In electrification, the figures are even better with the Q4 at 18% and at 11.6% full year. This is driven by the very strong performance of transmission. An activity that we'll be discussing further, which has increased a lot in terms of volume tolerability over the last 2 years, but also Grid and Connect, that's made a lot of progress.

The EBITDA we'll be looking at at profitability, but transmission and grid are the drivers of the improvement of our profitability. We have an all-time high margin at 13.3%. Let's look at each segment in detail, high-voltage and transmission. This is an activity that has reached sales of EUR 1.6 billion in 2025. As a reminder, it was almost half of this in 2023. This activity has strongly grown over the last 2 years following the capability-related investments that we made with the shift, there will also be delivered but also investment in production lines in Norway.

It will soon be completed also in Belgium. We are clearing a very large backlog. You can see that it has kept growing in 2025 as it reached EUR 7.7 billion after EUR 7.4 billion in 2024. We have good visibility until 2028, 2029. This allows us to optimize further production and the efficiency of our assets, whilst sales teams are working to start and fill up the backlog for 2028. Improving margins is a priority objective for the Transmission division. You know that 2022-2023 was a difficult cycle. 2025 demonstrated our ability to set this right. So we reached 12.3%. And as we've said, the division is now on the right track and is well set to exceed 15% by 2028, which is the objective that we set for the team.

Grid now. Flat findings indeed, outstanding news. We also have growth but also an improvement in the margins very strong. Grid has become 1 of the real driving forces of the group's profitability. It's a very promising market with lots of capability constraints, which is quite fine for us. It's helping us a great deal. We are constantly on the lookout for capabilities. And financially, teams have delivered a profitability at 16.4%. And which is quite high. Clearly, this is the high point. This is thanks to the operational excellence and all the work that is done to cherry pick the deals that we go for and the activities that we deliver to drive profitability.

Also, the sterling performance of accessories, which is in the Grid segment, which is accretive and growth and accretive in margin for Grid. Connect, now low voltage, also a solid performance with more diverse regional dynamics. Organic growth was in line with our midterm guidelines. So there is growth. Q4 was very intense with some expectations of deliveries. The EBITDA keeps going up massively. We are also working on a number of topics to try and drive profitability, especially topics related to one-off events in Asia Pacific. Also, the scope of -- on the scope of La Triveneta Cavi, we are in line, but it's quite -- it's quite a big chunk for our big chunk of work for our teams. We have also launched a number of improvement programs for operational excellence to set things right.

Now all this income statement allows me to move on to the balance sheet. In terms of cash, the change in the net debt is very positive. As you can see, it's summarized on this slide. With the FCF free cash flow that is highly positive cash flow from operations of EUR 808 million. Of course, it's driven by the EBITDA performance, but also the change in WCR, which was very positive. These operational aspects. They do show that cash generation is a very important priority in the work of our teams. It's a real focus for them. We managed to finance EUR 483 million in industrial investments. CapEx, growth investments. We mentioned those for transmission, but not only we will also have a lot of investments into maintenance and on the rest of the portfolio.

All this cash generation allows us to pay out dividends like the 1 that is proposed today to pay a number of acquisitions, RCT to pay for a number of acquisitions rather -- also in the last bar, EUR 727 million, all discontinued activities, activities that were sold and auto electric. We have a net debt of EUR 266 million and a very positive leverage of 0.36 for 2025.. This 2025 performance builds upon and strengthens the balance sheet. It was already very solid. Our cash position is more than EUR 1.6 billion in a very strong improvement against 2024. If you look at all our liquidity, if you take all our credit lines and financing more than EUR 2.6 billion. If you look at the debt maturities, the time line, we are quite confident about it. The first maturities will be in 2027 with loan by the IB where we do have room for maneuver. It gives us a very positive position where we can redeploy our capital very much so and a credit rating by S&P, which is stable at BB+ and an average leverage for the group, which is already investment grade, even though we are not officially rated as such.

This has allowed us to finance the acquisition of Republic Wire deal that we have signed, but that has not been closed yet. Julien mentioned all the strategic interests with this deal. I wanted to highlight the financials of that transaction, an enterprise value of EUR 680 million which acquired which allows us to acquire all of the operations. An enterprise value to adjusted EBITDA for 2027 at EUR 7.6 million following synergies are after run rate synergies. It is in line with our multiple states likely bill, but it is in line. So we did not have to pay too much for this acquisition or to pay too much. It was very important for us. In terms of financing, we will use a combination of debt and cash. This will temporarily increase our leverage above 1.2, but we are confident about our ability to bring it down quickly under one, thanks to the cash generation capabilities of the group and to Republic Wire that will continue to do its work.

We identified EUR 23 million in synergies in the next 3 years at cruising speed. 50% of these synergies will be -- will materialize very soon in the first year with cross-selling opportunities, low voltage, which is really their core business. We do have complementary products, technology synergies and industrial synergies. Financially speaking, this acquisition was don't add a good multiple. It does not have any major impact on our leverage and it's accretive in growth profitability. So we are delighted that we should be able to -- it's quite likely to close the deal in the coming days.

It allows us to offer you a very attractive return. TIs at 59% over the past 3 years. Based on the EUR 2.9 that is offered a very high payout ratio more than -- 42% and more than 200% over the last 6 years. As shareholders, you can see the reflection of this financial performance in the dividends that the group is happy to award to you.

Let's finish with 2026. We do confirm again the guidance that we issued at the start of the year with an adjusted EBITDA of EUR 730 million to EUR 810 million and a free cash flow of EUR 210 million to EUR 310 million. That's prior to the acquisitions, we were very conservative in the assumptions we made about the Grid's interconnected projects. And as you can see on the slide, we expect lighter performance in the first half, but a better performance in the second half.

Thank you very much for your attention.

Thank you, Vincent. I'd like now to ask Elena who is a member of the Executive Committee to join us. Ele is in charge of business development for large -- connect large projects in all and particularly for data center.

Hello, everyone. Hello. I am Elena Fedotova, I'm Chief Development -- Chief Business Development Officer for Data Center and Grid and Connect large projects at Nexans. Today, I'd like to talk about data centers. I have worked in this industry since 2019, and I have developed conviction since then. Data centers are not just not just a transient cycle; for Nexans, data centers, our real growth driver. I would actually say that they are 1 of our growth drivers. And that's what I would like to show today. We all use mobile phones. Whenever you do a search on your phone, whenever you take a picture of your family, this building that you can see on the picture here, steps in, it's a data center. It's an electrical building. And as you can see that it uses all between 9 2030, we'll use them more than 165% to 100% -- 165% more in electricity. That's over $3 trillion investments. That's France's GDP. France's annual GDP.

Thus, this is a massive market, and it will not come as a surprise that this market will double in size by 2030. It is driven by 2 trends: a technological 1 and a trend that is more sovereignty driven. As regards to the technological side of things, which you can always read in the press is that there are lots of stories out there about AI. Now what the papers don't say today is that 75% of data centers today are that 75% everything -- 75% of content is in the cloud. That's your YouTube videos, your Netflix video, your e-mails. And this growth is quite solid because even though AI work and I emphasize that if here. If the AI demand were to decline, this technological growth of the plan will continue between now and 2030.

Now there's also sovereignty Julien mentioned earlier on, the sovereignty of countries and data is part of that sovereignty. Today, -- if the state decides to limit access to data, it's also usually decides to invest into digital. It's a second growth driver, and you can also see some figures here on screen. Now I'd like to discuss again AI data centers. The data centers that host AI are not the same as traditional data centers that we've known so far. Artificial intelligence leads to several technology called disruptions, including in terms of electricity. And let me demonstrate this with 3 points. The first disruption or breakthrough is power density. What does that mean?

Let me give you a very simple example. 10 years ago, each and every 1 of us had a phone, a mobile phone like Nokia or still Motorola at the time. This allowed us to make calls or even to send text messages. Today, people have an iPhone. It's more or less the same size. But the iPhone is like having a computer in your pocket, having music, et cetera. What has changed is the density of data that you can squeeze into a given tool like a telephone -- and this is what's happening today with data centers. This is what I call the density of the server density that is really changing. Now what are the consequences? It's quite simple. Going forward, your conventional copper cable will reach its limits at some point. And that's why Nexans is proposing or offering rather today, superconducting cables something that we've been working on for over 20 years. It's part of our expertise.

And we are a global leader in superconducting cables. In short, superconducting cable is a copper cable, but it is nitrogen, liquid nitrogen cold. This is a real business expertise. Second example, direct current DC -- this completely changes the way electrical architectures are designed in data centers, including in terms of cables which is why today, people talk about solid transformers on the market. You may have heard a lot about this. But this is really what's been happening today. It's a real technological disruption is like Nexans.

So we do take part in working parties like shift to DC or even open compute. We are -- we sit at the same table as Google, Microsoft, Schneider Electric and other companies to define the standards of [indiscernible]. One last example, decarbonization -- it is becoming a decision-making criterion to choose suppliers. Earlier on, Julien mentioned our foundry in Nexans which, going forward, will be able to produce cables, including recycled ones.

Now let's come back to our traditional business. How do we stand out as Nexans. Three things. First, our focus; second, our technological edge; and third, our commercial positioning. First, let's look at our focus. In 2018, we took a gamble. Nexans decided to focus on electric cables. That means that we, through all our weight, we made a concerted effort to focus on the electric properties of cables. Then technological edge or leadership. I mentioned this earlier on. I don't think I need to labor the point. But the main takeaway here is that you build technological leadership in the long term. That means R&D investments, which is what we do, but also the industrialization that Nexans has embarked upon throughout the years.

And 1 last thing, of course, our commercial positioning. Today, our objective and what we do with our customers is that we are becoming a strategic partner that is we engage our partners early on to discuss the optimization of CapEx and OpEx in relation to cables. So 1 example, like, for example, the ergonomics of the cable that you may already have heard about the installation of cables on building sites. This is really what makes the difference. And a few examples, of course, I cannot not share examples with you. The first 1 in North America. Tim is here with us. But on the North American continent, we landed a major contract with the data center. What really tipped the balance in our favor was our global coverage but also supply and the reliability of our supply.

Second example, in Europe. Here, we were awarded a project in France, and what played in our favor was our technical expertise. We involved the entire decision. We worked with all players in the decision-making chain of our end clients. That is a nice hyperscaler. We worked with an operator and an operator that works with data centers. We worked with an engineering and design firm with the general contractor, but also with the certification body in order to solve the problem that the customer asked us just to address.

Then Stella Nova, it's our global first in low-voltage superconducting cables. It's really a world first. There is no equivalent cable today in the world. It's a demonstrator I need to specify this. Now in conclusion, I would like to say that data centers are a growth driver for Nexans. Our ambition is fairly clear. It was announced earlier on by Julien. We want to double in size this market by 2028. We want to a double-digit percentage of our sales between 2028 whilst protecting our profitability for us and for you, in line with the group's objectives.

Again, it's a very simple conviction. There's growth on this market and Nexans is well positioned to harness it. Thank you.

Thank you, Elena. I'd now like to invite Guillaume, who is a member of the Executive Committee, who's the Chief Strategy and Purchasing Officer. He's going to give us a presentation about artificial intelligence and how we're going to use it at Nexans. .

Greetings, everybody. Elena has just mentioned or discussed the infrastructures that hosts AI. Well, I'd like to talk about the use that the company like Nexans can have of AI. This auditorium is located at about 25 kilometers from the Oase Airport. And as I'm speaking to you, and now this EUR 320 million is taking off. In the cockpit, both pilots have very [indiscernible] this cockpit looks complex for us, but for them, it's simple. It allows them to safely fly the highly complex system. AI for an industrial company is the new cockpit is the new flying system. Now what does that mean for Nexans .

For us, AI is a vehicle to generate performance, industry and commercially that sounds quite obvious. But it's not that obvious to say that it's a performance driver through collaboration because AI through data makes it possible to bring different business lines closer to one another to bring meeting rooms closer to the field to factories. AI is also a tool for resilience, thanks to prediction, anticipation. It's also a differentiating tool to better serve our customers and Nexans' staff. Now what does it all mean in practice at Nexans? A simple way of imagining AI is to look at it as having 3 layers. The first layer, which is what you sometimes buy a knowing you like copilot, for example, or Claude or ChatGPT that you may have in your pocket on your smartphone.

There's a second layer. What is available off the shelf, what you can buy for your business? You just need to go out there and look for it. For example, the in-car system that we use today to detect patent infringements and take the required steps I'd be tempted to say that these first 2 layers are the layers of curiosity. That is being inquisitive about a world that is changing, a new world individually and as a group. But more interesting is the third layer, the layer of imagination. What is this lay of imagination? Is the AI that's you or that we will develop specifically for our business to create a sustainable competitive edge. And that's what I'd like to talk about today.

You may have heard of the SHIFT program started in 2018, and this is our own internal transformation program. This provides the tune of EUR 300 million to the company's EBITDA. But what is it exactly? What is shift? Well, it's all about using data as close to the ground as possible in our plans in our offices it's at any key point in the life of a contract, and this is there to drive functions to make the right decisions to drive the company properly. So what's that got to do with AI [indiscernible] asked?

Well, it is believed today that a good manager, anybody running their business properties will use maybe 5% of all available data -- now with a shift, we moved up to 20%. So you go to a local databases with our teams, we go and recover sometimes conceal the data to generate performance both in terms of service provision, free cash flow, EBITDA, additional sales. Now with SHIFT AI using data massively, we can use as much as 90% of available data to go faster and also have a greater impact. Now then what does this mean in practice? I'll give you a few examples before we deep dive into this. Reducing complexity. What is this all about? It means, well, for us doing what is, say, good or bad [indiscernible]. In other words, focus our attention to the best clients, best partners, best products and serve our customers best. SHIFT also means getting the best and real-time price adjustments to get the best prices adjusting to inflation or the scarcity of resources.

But let's move to something else, inventory. You might ask why do I talk about the inventories that's not the -- well, not particularly original. It has, of course, plays a lot all levels of the company in all business units. I mean inventories is about supply chain for industrials for the financial guy or the sales guy trying to serve his customers best. So what's the right size of inventory to suit our businesses best. And that's what shift helps us do. But AI on the ground, that is the person actually positioning the pallets of the right space in the industry in the storage houses, so as to have the best possible for those. Basically, you're creating connections between different parts of the business between the different units.

All the way from the warehouse to the top of the company. Now engaging AI something new. And what is critical stake is speed. Speed because the world is changing at unprecedented speed. We have companies investing massively in infrastructure, but also in the use of AI. So we've got to be fast. But we have -- we must not work in a disorderly fashion. There are rules. You have to obey by rules but there are also ethical issues because the purpose is not so much to replace our employees with AI. We want to be able to, in fact, have more people and indeed enable them to earn more.

Whether you're driving a company or a plant or a workshop or indeed a single machine, flying a plane, a good pilot shouldn't be afraid of his or her instruments, a good part should be able to to use new instruments, how to control them. And our ambition is to -- for each of us to become familiarized with AI using a knowledge we can train our people at the right time in the right place, helping them make the most of in their own activities. Thank you.

Thank you, Julien, Vincent, Elena and Guillaume for this very fascinating presentation. I call on Marc Greenberg who is directly in charge of climate and environmental issues, as he is Interim Chair of the Strategic and Sustainable Development Committee. He'll tell us all about the climate strategy.

Yes. Thank you, Julien, and good afternoon, everyone. It is my pleasure to give you a progress report on the implementation of our decarbonization road map and indeed the work of our committee on monitoring climate challenges and more generally environmental challenges. So back in 2025, We, of course, looked at our decarbonization road map. And more specifically, we started a new initiative proposing to consider ways of decarbonizing high emission activities that are the most challenging looking at metallurgy shipbuilding and of course, this is a complex business, but we will be investigating various options. And once we make our choices, we'll let you know more.

We've also reinforced our Board's competent in terms of climate and sustainable development. Indeed, in 2025, we looked at the circular economy and more specifically, all directors -- well, members of the committee were given sort of training on copper recycling -- this is particularly relevant for Nexans in terms of strategy because metal recycling enables us not just to secure our own supply in raw materials that are becoming scarce and scarce but also, it enables us to expand our offer of low carbon products and then again make a difference compared to the competition. Now still as part of the circular economy, we've been monitoring project in loans. We are looking at a significant capacity in precisely copper recycling with a view to providing low-carbon products. Another thing we've been looking considering in 2025 is the integration of our new acquisitions, new businesses inside -- Nexans' scope of activity. So from day 1, when we acquired business, we need to include climate aspects as well and make sure that, that new acquisition also follows our own decarbonization trajectory.

So earlier back a few years ago, we announced our climate objectives. So we're looking at reducing our Scope 1 and Scope 2 emissions to the tune of 46% by 2030 compared to the baseline, which was 2019. Regarding Scope, 3 emissions by 2030, we're looking at a 30% reduction compared to 2019. And so where do we stand? Well, in by end 2025, our Scope 1 and 2 emissions were already down 49%. So we're ahead of schedule. Indeed, there were intermediate steps. We overshot that. Looking towards 2030. Regarding the energy efficiency of our industrial activities, we were able to reduce Scope 1 emissions for Scope 2. So that is emissions included in the power and electricity we purchased, we were able to decarbonize our own -- well, the electricity we purchase and reduce the share of fossil fuel in the electricity we use by building our own solar panels, for instance.

And then for the Scope 3 emissions, we were able to bring emissions down 40% by end 2025. So there again, we are well on track to achieve our ambitions by 2030. Now 1 decisive factor in achieving that performance was extending our offer of low-carbon products. And that, of course, will have a direct effect on the Scope 3 emissions, but also we were able to continue decarbonizing our own transportation systems.

Now then the commitments regarding 2026 are in line with the to previous years. We're implementing our decarbonization road map, but we will also be focusing on those activities. Activity is more difficult to decarbonize that is ships and metallurgy. But we're approaching this in a very pragmatic way. We'll try to try and find the best and most effective. We are achieving our objectives in terms of decarbonization. We need to identify those solutions that enable us to bring emissions down fastest, cheapest with least capital expenditures. So there has to be some trade-off in the various options before us.

Now then regarding upscaling our Board, we've been continuing with our training programs, and there will be a program to do with Scope 3 emissions. And why Scope 3, you might as well, that's a sort of complicated concepts. We sometimes believe that Scope 3 is the other guy's problem. And sort of makes sense because, of course, Scope 1 and 2, I mean, Scope 3 is basically the scopes 1 and 2 of our supply and our customers -- but we do want to work with customers and suppliers to reduce their emissions. And so therefore, reducing what amounts to our scope emissions. And our scope 3 emissions are quite significant when it comes to the use of our -- of the products that we sell or the services we provide. And so we'll be looking at that more carefully in 2026.

There is another thing I forgot to mention, by the way, regarding our achievements for 2025, if I can we go back to the previous slide. On paper, it looks as though we are ahead of schedule regarding ambitions for 2030. Having said that, you shouldn't extrapolate from that. not -- at least not in a linear fashion for very simple reason. If we look at our -- when we define our ambitions for 2030, that included growth objectives, both organic and inorganic growth, external growth. And so we have to include all that in our objectives.

Now then the -- the last item is that we have been recognized by third parties for our performances, our commitments in -- for the environment, our climate objectives because we've achieved outstanding scores in particular, the carbon disclosure protocol or EcoVadis and systems in a we were at least as good as the previous years. And in some cases, we actually did even better. Now it is -- for us, it is important for us to be able to to confirm our own ratings and to have our own internal rating confirmed by third parties from the outside and is, of course, extremely motivating teams to see that to be recognized in such a fashion. Thank you so much.

Thank you, Marc. And now I'll call on Anne Lebel, who is the Lead Independent Director and Chair of the compensation and governance and corporate Governance Committee and indeed, compensation committee to tell us about the compensation policies and the resolutions that are -- that have been devised by committee.

Yes, good afternoon, dear shareholders. So the work we've been doing at our committee for corporate governance and compensation. So I'll introduce all this transparently with a view to highlighting sustainable value and openness. So the Board that we have is publicly in line with AFEP-MEDEF Code in its most recent version. We have directors, including independent directors with a balanced diversity in terms of gender, nationality, experience and skills. Composition of the board reflects the fact that we want to have a highly demanding and committed Board, especially as regards matters of electrification, innovation, finance governance and sustainable development.

Right now, we propose to renew the terms of 2 independent directors, Laura Bernardelli and myself. That comes under Resolutions 4 and 5. We have the appointment of new independent directors, Antonio Cammisecra and Thierry Fournier under Resolutions 6 and 7. These 2 appointments follow the departure of the 3 directors representing Invexans, [indiscernible] Francisco Pérez and Oscar Hasbún í Martinez. The new employee representative [ Riku Soininen ] who joined us in February. Soininen -- I beg a pardon.

2025 was a very intensive year -- in 2025, there were as many as 12 meetings of the Board and 36 committee meetings. Specifically, we looked at the succession plan for the CEO. You have our new CEO, of course. So we also looked at the conditions of his predecessor's departure and the compensation package for the CEO and will go into the details of that later on. Now renewals and appointments come -- are in line with the continuity plan for the Board of Directors. So we propose to renew the term of Laura Bernardelli for 4 years. She now chairs the Audit and Risk Committee. She has been since 2022. If you confirm this renewal, then she will keep going in that capacity. My own term as a director for 4 years. And so if you do to me and this will mean that I will continue with the same mission.

We have 2 independent directors for the 4-year period. Antonio Cammisecra. He is the CEO of ContourGlobal. He has been since 2024. Before that, he worked for Enel for more than 20 years. He was -- he participated in the development of Enel Green Power to make it a giant in renewable energies and he worked in [ Dow Greens ] from 2020 to 2023. He has wide expertise on electrification and the power industry at large. He joined our Board as a nonvoting members in March 2026. Thierry Fournier is Head of Roquette has been since 2025. And before that, he was Managing Director of Saint-Gobain. He will provide his own significant industrial expertise, and he joined your Board as again, nonvoting directors in March 2026.

And now let's take a few videos, introducing these 2 candidates and indeed our new employee representative.

[Presentation]

And now we will look at the compensation policies and packages starting with the year 2025. We started with Resolution #8. We propose a partial waiver of presence condition on ongoing performance shares to acknowledging CEO's exceptional performance and significant value creation since 2018. EBITDA grew 276% capital market value up to 422% from EUR 1.05 billion to EUR 5.5 billion at end 2025. We don't accelerate the acquisition of performance shares and those that were not acquired lost for good, including those that were supposed to be acquired in 2025. So we're looking at 31,794, shares. So that's 34% of the initial allotment that could remain. These shares, of course, remains subject to performance conditions as set out by the Board of Directors.

Resolutions 10, 11 and 12 are to do with the compensation of executive corporate officers, expert factors. So these items for 2025 are detailed in the universal registration document. Starting with Resolution #9, and that is the compensation of directors and that you are supposed to vote on during the 2025 AGM, you -- there was a maximum aggregate amount of EUR 820,000 for dedicated missions for the independent lead directors and the Climate Director. In 2025, there was intensive activity, 36 committee meetings. And so the total amount of 2025 was capped at the authorized amount. And so it was a total of EUR 820,000, 100% of the maximum aggregate amount -- compensation for the year 2025 as the Chairman of the Board, and this is voted on -- under Resolution #10, in line with the resolution of last year. The compensation package stood at EUR 320,000.

So that you are no other compensation or indeed any kind of benefits in kind.

Now, we move on to Resolution #11, and that is the compensation for 2025, Mr. Christopher Guerin, who was CEO until October 12, 2025. This is worked out on a pro rata basis and in line with the compensation policies for corporate offices as approved in 2025 by the AGM, the fixed compensation stood at EUR 743, 148. The variable part, variable compensation also worked out on the pro rata basis, stood at EUR 898,287 that is 80.6% of the maximum or 121% of the fixed compensation, reflecting the group's outstanding performance in the year 2025.

As part of his departure at the behest of the Board and in line with AFEP-MEDEF rules Christopher received severence compensation capped at 2 years of actual compensation since the limits were reached. But protect the group's Mr. Guerin is subject to a noncompetition clause that is valid until June 2027. Other items of compensation are listed there. You have pension and other benefits in kind.

And now looking at resolution #12, and that is the 2025 compensation for Julien Hueber, who has become -- who became CEO in October 2025. This has also worked out on a pro rata basis and in line with the compensation policies for corporate offices as adopted by the AGM in 2025. The fixed compensation stood EUR 157,000 for the year, so EUR 163, 360 on a pro rata basis. The board worked that out based on the -- on the CEO's new profile and skills and also in line with market practices for the variable part of the compensation.

In 2025, there again, this was in line with the compensation policy for corporate officers. And so the variable part, the target was 100% of the fixed compensation. You could have as much as 110%. If there is an overperformance, 65% of the bonus is based on financial criteria, 35% on individual criteria that are predefined that were predefined by the Board. The variable compensation for '25 stood at EUR 207,400 so 84.7% of the maximum bar, so 126% of the fixed compensation.

If you're in line with the compensation policies, 2,500 shares. So 64% of the fixed compensation were allocated under his term. And this comes along with 100,000 shares -- 1,000 shares that were granted in his capacity as a Managing Director for Europe. And on the right-hand side, you have other items, severance noncompetition, pension and other benefits in kind.

And now the conversation for 2026. So this is forward-looking for directors and the chair. So we're looking at all these items you will find a comprehensive presentation in the universal registration document. The compensation policy for 2026 for directors and the Chairman of the Board are subject to votes under Resolutions 13 and 14 for directors, we're looking at resolution #14. What we propose to do is to keep the same policy in 2026. -- i.e., we have mostly a variable compensation with attendance and effectiveness criteria for directors. We will not change the the maximum aggregate amount, which still stands at EUR 820,000.

Regarding the Chairman of the Board, that has been -- this is reviewed on a multi-annual basis. It remains the same for 2026. So we're looking at EUR 320,000 for fixed and compensation and no other compensation for the year 2026. And compensation of the CEO of that resolution #15. So you have 3 principles. You have a competitive compensation in line with market practices and reflecting the CEO's experience, balanced compensation with an equivalent weighting you have short-term and long-term variable items and compensation consistent with the group's policy -- we want to make sure that the CEO should have a skin in the game and an incentive to achieve the group's long-term ambitions.

So this is for you to vote on. We're looking at a compensation policy competition package. The fixed part of it is EUR 750,000. The variable annual variable compensation is 100% of the fixed conversations, so that can reach 150%. No change between collective and financial criteria, which account for 125% and then accounting for 65% -- sorry, in the other objectives, the nonfinancial accounting for 35%. The long-term variable compensation cannot be more than 150% of the fixed compensation. So you had the performance shares worked out over a 3-year period, 40% on an economic criteria, looking at margin -- EBITDA adjusted margin and free cash flow. You have other external factors looking at total shareholder return compared to a benchmark basket and Euronext rating. And then you have non-ESG objectives added to that.

The other compensation items are also listed here they are unchanged, and they include such things as end of termination, noncompetition and other benefits in kind. And finally, the last 2 resolutions are free shares and performance shares for the year 2027. So that's resolution 18 on free performance shares for the CEO and the group's senior managers, Resolution 19 is on free shares without performance. requirements, and these are for high potential employees, key experts and managers. For resolution #18, the performance shares are allocated based on 3 performance conditions, financial criteria, economic criteria and ESG criteria. So of course, these are the same criteria as applied to the CEO. This is -- the vesting period is 3 years in line with performance conditions and again, perfectly consistent with market practices.

The performance shares for this year cannot be more than 12% of the aggregate -- the total number of shares in 2026, this was 3.9% of the total number of shares. So this we suggest a maximum of 330,000, shares. The amount being unchanged. And so for Resolution 19, the free shares for key experts and outstanding employees, these have a 3-year vesting period with a maximum of 50,000 shares. That amount remains unchanged. We're looking at 0.1% of the company's stock capital.

So this -- these were the resolutions regarding governance and compensation. Thank you for your attention.

Thank you Anne. I'd like now the statutory auditors to present to the general meeting, the summary of their reports. And I hand over to Ms. [indiscernible] risk of PWC, who will be representing the statutory auditors to present their reports to the meeting.

Thank you, Chair. Dear shareholders, good afternoon. On behalf of statutory auditors, Forvis Mazars and PricewaterhouseCooper audit I'm thrilled to report to you on the independent task that you entrusted with us. For this financial year, we issued 7 reports to your attention. One on consolidated statements, which is to be found on Pages 43 to 46 of the Universal Registration Document. Report on the annual statements on Pages 425 to 427, a special report on related party agreements on Page 35 and 336; a report on the certification of sustainability information, Pages 222 to 225. And last, 3 reports on capital operations. As is customary in this meeting, I suggest I now summarize the key elements of these reports.

Let me first start with our report on the group's consolidated financial statements that were drafted according to IFRS standards as adopted by the European Union. Our work on consolidated statements are meant to give you the reasonable assurance that there is no material misstatement. Our audit approach was adapted to the specificities of your group. This approach and the findings of our work were shared with the financial department in the course of regular exchanges. We also reported in our work to the audit statements and Audit Committee and to the Board of Directors. Our report on consolidated statements include 3 key audit matters the recognition of goods and services contracts mainly for the power transmission activity, litigation disputes and entrust investigations and the measurement of goodwill.

Following this work, we certified the -- we issued an unqualified approval and certification of the consolidated statements. Second report on the corporate financial statements of Nexans -- the valuation of shares and subsidiaries and affiliates and antitrust and investigations are investigations and disputes. We have issued an unqualified certification of the statements. We have issued a technical observation in connection with the application of accounting standards and the modern [indiscernible]

Our third report pertains to related party formed informed of any related party agreement besides our report also addresses put into and approved in the previous financial years that were implementing pertains to the certification pertain compliance with ESR standards and the European regulation. First, on the processes implemented you reported, but also including the sustainability statement. And last, as regards to the compliance of information in terms of taxonomy based on the work consistency or any lack of compliance with regulations.

Last, as regards the extraordinary part of your general meeting, we issued 3 reports that relates to resolutions '17, '18 and '19, that grants [indiscernible] consequence on the share capital of your company. These reports do not include any specific observations or comments and we shall issue supplementary reports if appropriate when these authorities are issued.

Thank you very much for your attention.

Thank you, Emily. Thank you to our auditor. Might I suggest we now open the question-and-answer session, the Q&A which shall answer questions in the room and those asked online live on the Internet. If you are in the room, I invite you to ask your questions you think the microphone provided. And I'd like to remind you that only shareholders may speak. Moreover we'll only address questions relating to today's general meeting. Please make sure you introduce yourself before you ask your question.

So who would like to start -- the first question maybe. Someone has to start, right?

I'm an individual shareholder. I have 2 short questions. You buy copper, Don't you think that hoarding or concealment because a lot of material is being still at the moment. Now we have a dividend of EUR 3. That's very nice. That's all very nice, but the share is [Technical Difficulty] profitability is acceptable. My question why isn't it possible for us to reinvest our dividend into shares?

I will first answer your question about copper. Obviously, we buy copper for our factories to be able to manufacture cables. We sustained some tests in the past. We took all necessary steps to be able to track and trace every lorry that transports our copper, uncovered bare or raw copper that is then sent to our cable plants. As regards to the amount of copper we use in 1 year and considering the amount sterling during these tests, we consider that this is very limited indeed.

A question of Mike. Julien Hueber as regards to copper that we buy back, we buy spent cables, so it's not raw copper. These are spent or used cables. We have introduced a weighing system at each of our customers, our platinum customers. They handle the traceability and the amount of copper using ways. They make the measurements. This system today is certified -- and we cooperate with our customers. Of the origin, -- this copper comes from electricians that refurbish buildings and flats. And rather than disposing of these cables or going to foundries they would rather reuse it or have it reused and reinjected, so to speak, into a recycling loop. That's why they approach Nexans.

Mr. [ Muto. ] I suppose your question is to know whether cable thieves could resell these cables to us, people who steal cables from -- on railroads, Mr. Hubert the people who resell these cables are regular customers who are in our database in our [indiscernible] database. Mr. [indiscernible], but that's a legitimate question as we are going to go to scale with the last plant. We are going to have a growing need of recyclable copper. So far, it has been a moderate size plant Mr. Hueber. We have already gone to scale, but we work with companies. You have copper telecom cables, land cables. We buy them directly from companies like Orange that collect used cables. So it's really part of the the official and [indiscernible].

As regards to dividends, that's a very good question, [ Mr. Mouton. ] That's a very good question. We had first discussions at that time, the share price was rather in the vicinity of EUR 120, not at the current price because these discussions usually take last at the start of the year. We want to make sure that this dividend can go up every year, which is what we have delivered in the last 5 years. We tried to -- we try to payouts about 2.5% to 3% of the share price clearly with EUR 2.9 next year. It will depend on the share price. We want to have a payout policy that is predictable and sustainable for us and for our shareholders. But it's all very important to us.

Now -- as regards the second part of your question, you said that maybe these dividends could be paid in securities, right? Okay. We asked this question ourselves a few years back, we looked at it, but we found no simple solution for a company our size. Therefore, we gave it the idea -- but I have to say that I discussed this with the Secretary General at the time because I thought it would be a very good idea to give this option to our shareholders receiving the securities rather than cash. I don't know if you'd like to add something, Mr. Cusimano.

Yes, we did look into that solution. We did discuss this at the time. We ruled it out because it was difficult. There was a lot of paperwork involved. It made it very difficult. It was unworkable at the time. But we did think of it. Question off Mike, I'm afraid.

Mr. Muto? Well, right, right. Let's be clear here. We would like to do it, but only if the paperwork, the formalities remain reasonable -- at the time, when we discussed this with other listed companies, some of which actually had switched to that system and then revert to the previous one, they will -- so we discussed this at the time, it was 3 years ago, but I suppose we'll look into it again. Yes, absolutely. Thank you. Thank you for your question, sir.

Any other questions? -- over there.

Good afternoon, Mr. [indiscernible]. I'm an individual shareholder. I have several questions. When you buy companies and I gather that, so it has not been entirely finalized for Republic Wire, which of your competitors could also take over companies. I have another question about your competitors, Nexans' competitors. And about the ship, does it help the sovereignty of France or other states? And 1 last question. I saw that there were stories about the departure of Mr. [indiscernible], Mr. Julien in 2025. Could you give us more detail? There have been a lot of changes in the management team, a lot of changes indeed.

Mr. Hueber , I'll answer the first question. When we took over Republic, you need to know that we were the first -- they're the only ones to negotiate with that company. We know the American cable manufacturing market very well. Not that long ago, with our cable wire factory, we would supply all of these manufacturers. So we know that company very well, the quality of their managers. We were the only ones to negotiate with them. There were no competitors. As for your second question who are our competitors overall. Well, the cable-making sector is fairly fragmented. There are only 2 companies that are global that have the footprint across several continents. Next answer is 1 of them. The rest of our competitors are more regional or domestic competitors. And at regional domestic level, we are -- you're looking more at private family-owned companies. That's so much for the competition landscape.

Now we have a footprint across all markets. And this allows us to pool our industrial footprint with the different factories to try and it allows us to use production capabilities on the most interesting markets. About the ship right. Well, first, let's inaugurate the ship. It will really be handed over to us on the eighth of June. This ship is much more effective than the previous ones. 13,500 in tonnage in terms of cable, though the previous 1 was 10,000, so it's much more we can store more mines of cable. We can pay off more distance, which is quite important because we deliver with supply sites, the well over so we can pay off more in just 1 passage or crossing, so to speak.

Also, in terms of CO2, that means we emit less emissions. We have engines also that help us save energy. It's more powerful, faster and it transports more cable.

Yes, and it's not so much additional capability, but it can replace other ships.

Right. Today, thanks to our order intake, we have a visibility on our workload in our transmission factories until 2028. Today, our factories are already running at 100% of their capacity. Now that we are getting this new ship, it will allow us to stop renting ship, ship that we're currently renting, that means we will have our own fleet. We'll stop renting.

Right. You referred to the different departures. First, for the record, [ Mr. Julien ] and Mr. Guerin left the company several months 1 after the other. [Technical Difficulty] and it's absolutely unquestionable. When we launched the simplification program with to help the company to make a leap forward. Thanks to Chris qualities in terms of marketing, sales, where he has made a huge contribution to the company. When we announced the program to -- during the Capital Market Day, the amplification program -- we call it AMPLIFY. We soon realized that what was important to us was to be able to better operate the assets that we already had, specifically industrial ones. And by discussing with the rest of the Board and in Chris, we concluded that despite the fact that Chris had done some really good work so far, the question was whether we had the right profile for the following 4 to 5 years given the industrial dimension of all this and also the need to build a company with a real operational dimension.

We have been looking at succession plans for the CEO since 2022. We have always done this in full transparency with the serving CEO, we did that with Chris, and we realized that we had to prepare ourselves for this issue of operational excellence. As you know, [ Julian ] has been in the company for a very long time. He spent 15 years in Asia, in China and Korea. And therefore, no inside out the most effective cable manufacturers the world over, specifically their industrial equipment. So we tried to think of what would be best for the company Therefore, we decided to change CEOs, and let's be clear, Chris, did amazing work until then.

Any other questions? -- sir?

I am an individual shareholder. You have mentioned the new ship that will soon be delivered. You said that you would stop renting a ship. Does it mean that it will cost less in terms of operations? Or will it be the equivalent to today's rental right? Well, we changed the type of cost as we're going to move from rental costs to amortization. This asset besides is more modern, more recent, more effective. So clearly, it's much more positive. And also, as Julian said, that the capacity or the ability to send out these ships in the North Sea, for example, and avoid storms. It will help us generate more value than with rented chip.

Any other questions -- do you have any questions on the Internet. We don't -- we have a question on the Internet. How can you explain the drop in Nexans' share price relative to competitor, [ Prysmian. ] Well, we do like to benchmark ourselves with our competitors. We are working on several things right now. The first thing is that our Italian competitor has a very strong exposure on the American markets compared with us. You know that in the electrification industry, exposure to the U.S. market attracts more investors. We are correcting this -- we have just announced the acquisition of Republic Wire in the United States, as you have seen it had an immediate positive impact on the share price.

Second, -- we need to do some work in-house on our transmission market. You have seen the profitability of transmission, which is in the region of 12% to 13%, where our competitors are rather in the region of 17% to 18% in profitability. So we are working on it. we're quite confident. We believe that in the next 2 years, we should be able to drive up this profitability. We will be on par with our competitors. Another aspect. It's the great interconnect project that we were awarded a few years back, which is pending. It's the undersea connection between Cypress and Greece. There are stories about it in the press. Of course, this project is pending. It's ground to a halt. It's quite a lot, EUR 2.5 billion in our order intake. And obviously, it does have a substantial impact on our share price.

So these are the 3 main priorities. Work on the United States. We are very much aligned with the management and the Board. We really want to grow and to harness wire Republic as a platform to grow in the U.S. market. So we'll make corrections there. We're also working with political authorities. We are trying to work on the GSI project, so the -- Great Connector project between Greece and Cyprus. Thank you very much, Julia.

You're just going to lay the pipes. So what would we are cable producers, so we will not be operating the target per se, but it's a beautiful project. because we're talking about 60 kilometers worth of high-voltage cables. So the entire tunnel infrastructure is being revised the piping. -- will be laid underground. So rather than having towers of pilots going through mountains the fact that the -- well, the high-voltage lines being underground is well, more aesthetic and also energy saving, and we won't be charging tolls or anything Well, just like the channel tunnel where you have a cable laid on the ground.

But the the difference is that the cable in the channel tunnel is on top of the time was this will be on the ground. And so well, they are revamping the tunnel and reelectrifying it as well. So they're killing 2 stones in one bird. It will certainly improve efficiency.

Sir, yes, I had a question about your purchase of copper part in loss with a new furnace that recycles copper, you're looking at, say, maybe 20% or 30% of the European market. So you buy -- the rest is new copper that you purchased. What is your position vis-a-vis the rest of the world in the U.S. with Republic Wire, will you be using also recycling copper there like we do in Europe. And if you want to duplicate the operation to the same in Americas you have in will the market be different? I mean, in Europe, we are well ahead in terms of recycling. Could you create more value in the U.S. because I mean they're not -- if they are lagging behind in terms of recycling, you could bring added value with that. So not just efficiency gains, but also become more profitable.

But there are 2 questions with 1 -- the sourcing of copper cathodes comes from Chile. Codelco is supply there. There's also Peru, Australia, and some sources in Africa as well. So these are the main supply sources for copper cathodes. And then we want to secure supplier. So we have a 5-year rolling contracts. We always 5 years is ahead of the game. The fact that we also throw in recycled copper means that we can even buffer up that supply of copper because we already announced 2 or 3 years ago, and we still believe that at some point, there will be pressure. I'm not talking about shortages, but still pressure on the copper market. And pressure has begun. In fact, a year ago, we're looking at anywhere between $7,000 to $8,000 a tonne. Now we're looking at $13,000 per tonne of copper and some banks are looking at $15,000, $20,000 per tonne of copper.

So the fact that we can recycle certainly helps, plus it is for our customers, it's a sign of security. I mean, because of our size, because of the significant amount of recycled demand, we can be pretty confident about the supply, especially for titanium customers. Regarding the U.S., I mean, we have a blast furnace in Montreal, Canada, we do not recycle copper there. We may do so in the future. But the main thing is we have to look at the customers' appetite for recycled copper -- and therefore -- I mean, with the matching price because Europe is very mature on the environmental side. I mean some customers in ourselves been looking for low carbon coppers whereas in America, you haven't got the same sort of market maturity. But if we're in a position to provide recycled metal copper or aluminum, we will do just that because that's part of our 3Es policy.

Something about copper versus aluminum. Yes. To keep it simple, the low voltage we're looking at copper, mid-voltage aluminum. On aluminum, we are pioneers in as much as we have been pushing recycled aluminum cables and also recycled polymer cables. In other words, we are in a position for mid-voltage, -- we sell cables in Scandinavian countries, especially Sweden. These cables are looking at 50% less CO2 than the standard cable. So we really are pioneers in this respect and our customers such the likes of E.ON or even Enodis, they're very much keen to get low carbon in Europe and indeed in other territories as well.

[ Bernard Lume ] I'm an individual shareholder. And there's I'm much mistaken. There used to be a club of individual shareholders. Is it still around? I haven't heard of it?

Well, that you have -- it's a good question. We well, would you believe we discussed this with Angeline. She is the director representing employees on the Board. And yes, you're right. we should breathe more life into that club of individual shareholders. Club back in 2012, I believe. No, no, no, that was more than 10 years ago, but you're right. Right.

Any other questions? Well, if such is not the case, we can bring this Q&A to close -- and we have resolutions. So yes, we have 76.4% of shares represented. So we have a quorum. And Nino will tell us about the voting procedure. So a few words about that. You should have received a voting tablet as you got in. So on the screen, you will find the terms of the resolutions to vote. Then you'll have 12 seconds to vote for against or abstain -- and then you have to press okay to confirm. And then each resolution will display the number of votes issued your tablet not well properly, you will have people in the room who will help you.

We'll show you a little video telling you how to use device.

[Presentation]

Right then. Well, the time has come for us to vote on the resolutions. Now you will find them in the documents you received before and we will not read them word for word. So you have 15 resolutions for the ordinary AGM, Resolution #1 is to approve the statement to 2025. And giving the approval to the Board, you have to vote now.

[Voting]

And so Resolution 1 was adopted, you move on to resolution #2. We're looking at the consolidated financial statements and the Board's report thereof. Please vote now.

[Voting]

Resolution adopted. We move on to resolution #3, and that is allocation of income for 2025 and setting of the dividend. Please vote now.

[Voting]

Voting is closed and resolution #3 is carried. We move on to resolution #4. And here, we're looking at the renewal of Laura Bernardelli's term as a director. Please vote now.

[Voting]

And so resolution #4 has adopted congratulations to Laura. Resolution #5 is Anne Lebel's term renewal of Anne Lebel's term as a director, please vote.

[Voting]

And so resolution #5 has adopted. Congratulations to Anne Lebel. We move on to resolution #6, and that's the appointment of Antonio Cammisecra.

[Voting]

Adopted. We move on to resolution #7. Appointment of Mr. Thierry Fournier as Director. Please vote now.

[Voting]

The resolution is adopted. We move on to #8. and here, we are looking at the approval of removal of the attendance requirements attached to the shares allocated under performance share plans to Christopher Guerin. Please vote now.

[Voting]

And so Resolution #8 was adopted. We move on to #9, approval of the information relating to the compensation items paid during the fiscal year to corporate officers. Please vote now.

[Voting]

And so Resolution #9 was adopted. We move on to number 10. Approval of the items of compensation for the year 2025 paid to Jean Mouton, Chairman of the Board. Please vote now.

[Voting]

Adopted #11 now, approval of the items of compensation paid for 2025 to Christopher Guerin, CEO until [indiscernible].

[Voting]

Adopted. We move on to Resolution #12, approval of the items of compensation paid for 2025 to Julien Hueber CEO since October 13, 2025. Please vote now.

[Voting]

Adopted #13. Approval of the compensation policy of the members of the Board for the fiscal year 2026. Please vote now.

[Voting]

Adopted. We move on to resolution #14. Approval of the compensation policy of the Chairman of the Board for the year 2026. Please vote now.

[Voting]

Adopted #15 now. approval of the compensation policy of the Chief Executive Officer for the year 2026. Please vote now.

[Voting]

Adopted #16 authorization to be granted to the Board for the purpose of carrying transactions involving company shares. Please vote now.

[Voting]

Adopted. We move on to the 5 resolutions that come under the extraordinary AGM #17 authorization to be granted to the Board of Directors for the purpose of reducing the company's share capital by cancellation of its own shares. Please vote now.

[Voting]

Adopted. We move on to #18 authorization to be granted to the Board for the purpose of granting in 2027, free performance shares to employees and corporate officers of the group to the tune of 330,000 shares for 18 months. Please vote now.

[Voting]

Adopted. We move on to #19. Authorization to be granted to the Board for the purpose of granting free nonperforming shares to employees or to some of them, maximum amount 50,000 shares starting in January 1, 2027 for 12 months. Please vote now.

[Voting]

Adopted #20, that's an amendment of Article 12 of the company's bylaws to be in line with the women on board directive regarding gender balance on the Board. Please vote now.

[Voting]

That was adopted. We move on to #21 amendment of Article 19 paragraph 2 of the company's bylaws to raise the statutory age of the Chairman of the Board from 72 to 75. Please vote now.

[Voting]

And now we have #22 that's for the ordinary AGM, powers to carry out formalities. Please vote now.

[Voting]

Adopted. Thank you, Mr. Chairman. Thank you, Nino. Well, we have exhausted the agenda. So the meeting stands adjourned. I would like to thank you for attending the meeting, both here in the auditorium and online. We'll see you next year. Bye-bye.

Welcome to the Nexans' Q1 2026 Financial Information.

[Operator Instructions]

Now I will hand the conference over to the speakers, Julien Hueber, CEO; and Vincent Piquet, CFO. Please go ahead.

Good morning, everyone, and thank you for joining us today for Nexans' 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 and core businesses, delivering a robust plus 4.9% organic growth in Q1, fully in line with our road map and supported by strong underlying demand.

At group level, standard sales reached EUR 1.5 billion, 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 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 EUR 520 million of current sales, which will significantly strengthen and diversify our Power Connect activities and our overall electrical footprint in the Americas. This acquisition is in line with what I have mentioned a few times over the last 6 months. M&A in the U.S. is one of the key focus area for Nexans.

And just to give you a number, in North America, our sales is moving from EUR 350 million in 2025 to now more than EUR 1 billion of 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 segment. You can see all 3 Electrification segments delivered a solid start of the year, driven by organic growth of Power Transmission at plus 8.8%, Power Grid at a plus 5.7% organic growth and Power Connect at 2.5%, confirming the healthy underlying demand and the disciplined execution of our strategy across the Electrification perimeter. The other activities, mainly comprising of metallurgy has 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 tariff 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 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 EUR 342 million compared to EUR 308 million in Q1 last year, 2025, representing 11.1% growth, driven by 8.8% organic growth and a favorable foreign exchange fixed impact. This marks a return to more normalized growth after 2 years of exceptionally high performance, fully in line with our expectation.

Once again, transmission is about long cycle of tenders and activities, and we should see another couple -- we should see another cycle of growth in the next couple of years considering the amount of potential projects to be launched. Energy sovereignty 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 expected, it's important to bear in mind that our Q2 2026 organic growth will be a single-digit negative territories due to the expected project phasing effects. The trajectory should recover in positive territory in H2.

Turning to the backlog. Our adjusted Power Transmission backlog stood at EUR 7.9 billion at March end 2026 compared to EUR 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 first cable laying vessels, Nexans Electra expected to be operational by midyear 2026.

Let's now move to Slide 7 to Power Grid. Standard sales in Power Grid reached EUR 322 million in Q1 2026 compared to EUR 313 million in Q1 2025. That's an increase of 2.9%, driven by a solid 5.7% organic growth and the foreign exchange accounted for minus 2.8%. This strong organic performance was particularly supported by call-offs under long-term framework agreements, as we explained last February and a very good momentum in data center activity. Renewable activities also remain 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 Accessories subsegment continued to deliver double-digit organic growth, illustrating sustained demand for high value-added solutions driven by ongoing grid modernization and smart grid requirements. Overall, Power Grid is benefiting from excellent market trends and a high level of visibility with a solid pipeline across utilities, data centers and grid accessories, fully aligned with our midterm growth ambitions. And we continue to see the increase in the average duration of our framework agreements translating the growing emergent needs from DSOs for the coming years.

Let's now turn to Slide 8 regarding Power Connect. Standard sales in Power Connect reached EUR 647 million in Q1 2026 compared to EUR 603 million in Q1 2025. That represents 7.2% total growth, including an 8% contribution from acquisitions, 2.5% organic growth on the foreign exchange accounting for minus 3.2%. We continue to see a progressive recovery in Power Connect in some countries, although it remains uneven across geographies. The positive signals we observed in Q4 2025 have further materialized in Q1 in several European countries such as France, Spain and Italy, while Nordic countries remains more challenging as we have explained late in the last communication in February.

In Asia Pacific, activities started to stabilize, supported by recent management change. The growth in the quarter was strongly supported by M&A, which is a key pillar of our strategy and the recent acquisition of Cables RCT in Spain and Electro Cables in Canada contributed significantly to growth and their integration is progressing very well, fully in line with our road map, particularly in strategic segments such as data center and fire safety. Overall, Power Connect shows solid market fundamentals, and we pursue the deployment of our high value-added solutions and focus on premium customer, which support selective and profitable growth and provide the group with agility and resilience.

I will now hand over to Vincent for the highlights of our Q1 2026 and the presentation of Republic Wire.

Thank you, Julien. Good morning, everyone. So let's start with our standard sales bridge. We moved from EUR 1.478 million of standard sales in Q1 2025 to EUR 1.497 million in Q1 '26 on an increase of EUR 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 road map, which was offset by a negative 24.1% organic decline in other activities, mainly linked to metallurgy, as explained previously by Julien.

We had a minus 2% foreign exchange impact, primarily related to movements in the U.S. dollar and the Canadian dollar, which temporarily weighed on the reporting -- reported growth -- group growth, sorry. The remaining block is linked to scope contribution, adding plus 3.3%, driven by the consolidation of Electro Cables in Canada and Cables RCT in Spain with our Power Connect segment in which are both performing in line with our integration road map.

Talking about acquisitions, let me now present the acquisition we have just announced in the U.S. I'm very pleased to present to you this acquisition, which is a very important step in Nexans' journey. We have signed an agreement to acquire 100% of Republic 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 EUR 520 million 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 asset. 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, Republic 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 prefunded 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 is a genuine cultural alignment between the 2 organizations.

Turning to the financial terms of the transaction. We're acquiring 100% of Republic Wire for a total enterprise value of approximately EUR 680 million converted at the current dollar-euro exchange rate. There is also an earn-out designed to align interest of up to EUR 43 million 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 7.6x 2027 estimated adjusted EBITDA after run rate synergies and before earnout. We believe 7.6x is a very attractive entry point for an asset of this quality in a market of this size.

Before synergies, the multiple is 10.3x, which compares favorably to recent transactions in the market. And there's also the potential for the transaction structure to provide tax benefits for Nexans over time. The transaction will be financed through a combination of debt and existing cash on our balance sheet, consistent with our disciplined financial strategy. Pro forma net leverage is expected to rise to approximately 1.2x net debt to 2025 adjusted EBITDA and then delever to comfortably below 1x by the end of 2028. We expect our BB+ credit rating from S&P to be preserved, and we remain fully committed to maintaining a disciplined financial policy. We have identified approximately EUR 23 million of run rate synergies to be captured within 3 years. The phasing is front-loaded with approximately 50% being achieved in year 1. I will come back to these in the next slide.

And finally, the transaction is expected to be immediately EPS accretive before synergies and before amortization of intangibles and implementation costs. Closing is expected early in the third quarter of 2026, subject to customary regulatory approvals, we're well prepared to hit the ground running on integration from day 1.

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 EUR 12 billion, 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 Nexans, and Republic Wire gives us exactly the platform to achieve that goal.

The industrial rationale is built on 3 pillars. First, on platform, Republic Wire will allow Nexans to establish an expanded manufacturing and distribution platform within the U.S. geography, complementing the recent acquisition of Electro Cables in Canada. This creates a real platform for future organic and inorganic growth across the region. Second, on channel, we established immediate direct access to the residential and commercial channels through Republic's strong network of sales agents and distributors, complementing our existing global distributor relationships. There's also an opportunity to sell Nexans's broader product suite, including medium voltage in additional high-growth verticals, including data centers.

And on product, Republic Wire brings a focused portfolio and -- sorry, an efficient and recently expanded manufacturing footprint and a highly skilled workforce. Nexans 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 EUR 23 million run rate synergies across 3 clearly identified streams focused on revenue growth and margin enhancement. First, on cross-selling, where we can offer Nexans's comprehensive product offering, particularly in medium voltage and grid solutions through both Republic Wire's 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 footprint, 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 midterm 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 Nexans shareholders. We have already devised our integration plan and the whole Nexans 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 2026 guidance, and while remaining mindful of the current geopolitical tension on the international stage, we would like to remind you of the key levers we have in place to protect and improve our margin in this environment of inflation. So first, our main drivers of margin are pricing selectivity 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 operational excellence, meaning a margin over volume approach, strict pricing discipline on the deployment and the discipline on our shift methodology.

Second, Nexans 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 clause embedded in our contracts 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 aluminum sourcing. We source, as you know, primarily from a European rather than Middle East, in line with Nexans, we have a choice to secure low-carbon aluminum. And hence, we don't see any risk on the sourcing of aluminum.

Let me now move to next slide, Slide 17, regarding the guidance. So for 2026, we reiterate our full year objectives with adjusted EBITDA between EUR 730 million to EUR 810 million and a free cash flow between EUR 210 million to EUR 310 million, unchanged versus what we've shared with you during the last full year 2025 results. As a reminder, this assumes a softer first half 2026 compared to second half 2026, and it does not assume execution of the Great Sea 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 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, Nexans is in great shape with a robust business model evolving into attractive markets. Our business are performing well. The structural trends driving execution remains very strong and our midterm trajectory is unchanged. The acquisition of Republic Wire that we have announced today reinforce our positioning as a pure player of electrification. It significantly strengthened 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 Vincent, we will now be happy to take your questions.

[Operator Instructions] The next question comes from Akash Gupta from JPMorgan.

I have a question on Republic Wire. So in the last 12 months to February this year, Republic did EUR 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. rod 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 the plant in 2023. So the quality of assets, the quality of the machine are at a very good high level. And then it helped them to grow their sales in '23, '24 and of course, in 2025. And we'll continue to do so. As you have 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 manage very well their transition of the tariff because there has been no negative impact on their margin over the past year despite the tariff implementation.

And.

My follow-up question is also on Republic Wire. So I think you mentioned there will be EUR 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 EUR 23 million cost will be -- how this EUR 23 million cost will be used for driving synergies?

Yes. Yes, for sure, Akash. So it's -- in terms of synergies, it's more or less 50-50 top line on industrial efficiencies. There are some quick gains that we are -- we have identified the industrial parts namely the compounding aspect because they do not have any compounding lines internally. We do have. We have spare capacity in our operations in Canada. So that will 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 costing -- redesign to cost of our product. We have identified that is an area of improvement. There 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 innovations, and this is what we will scale to Republic.

So this is one second also Republic, as you have seen, is very much focused to resi and industrial applications. We do have close relationship with the big 4 of data centers on combining Nexans Canadian and South America medium voltage plus low voltage from Republic, we will drive some data center business, which 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 sell-side call that 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?

It's a good point, Akash. So indeed, the reason why we also are very confident with Republic is that we know this company very well. We used to supply copper from our Montreal metallurgy business to 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 reason. 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 tariff for copper will be removed.

The next question comes from Nabil Najeeb from Deutsche Bank.

I've got a couple. First, on transmission, do you have any update 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 renewable space been higher than the previously expected? And if so, do you expect that to continue to be the case?

And also, if you could also talk about the growth in the Accessories side, perhaps if you could further quantify the double-digit growth that you mentioned there and what the margins look like, that would be great.

Okay. So regarding MI, we have said that in Q1, we were finishing GSI last part of orders. 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 the small repair activities. And for the rest of 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 ongoing as per our plan and as per 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 win long-term frame agreements with our customers. On top of this, we also have in Q1, win 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 2026. So complete in line with our expectations, I mean, very good resilient business in grid.

On Accessories, while the Q1 was very dynamic, Accessories remains double digits. It's even higher in terms of double digit than what we have experienced in last year 2025. So here, what we always said regarding the accessories business is above 20% EBITDA margin. So extremely positive on the grid and accessories part.

The next question comes from Chris Leonard from UBS.

Maybe one for 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 a second question, you just mentioned there on Power Grid and in terms of winning new orders into data 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?

So Transmission, so regarding the pipeline of projects. So I think the things are in this large project, long cycle, they are not moving like one after the other, and we are on the same trend as what we explained last February. So we see -- 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 this is -- you see the geopolitical change with the Iran reinforce 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 in the years to come.

In terms of pipeline of projects, short term, it's more end of the year and mostly 2027 that we'll see this large project to come. Difficult to talk about the margin because we are, of course, preparing this tender, so we cannot communicate on the margin pricing whatsoever. But we do see there's a regain of, let's say, attractivity for the wind offshore.

Power Grid, so we have Power Grid in the U.S. This is ramping up. We have established sales organizations in 2025, many focus in data centers, many focus in medium voltage. So this is growing 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. And we are rerouting our capacity in medium voltage we have in South America and Canada to the 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.

The next question comes from Jean-Francois Granjon from ODDO BHF.

Three questions from my side. 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-cutting measures to adapt to the structure. So could you give us some more color about what do you mean when you mentioned the cost cutting or cost reduction for sure?

And the last question for the Connect business, you mentioned this growth -- organic growth for the first quarter. I would mention some growth for South Europe but more difficult for the Nordics. Could you give us the growth percentage for the South European country, France, Italy, Spain, et cetera, and the percentage of decrease for the Nordics area?

Okay. So I will start on your first question regarding the exposure of Nexans to North American market. So as I try to quickly explain at the beginning of this session, so we used to be -- we used to have EUR 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 EUR 1 billion. So that represents more than 20% of Nexans exposure to North America. This does not exclude -- sorry, it does not include the metallurgy in Montreal and does not include the Charleston plant. It's pure Grid and Connect exposure.

Regarding the Transmission, maybe Vincent?

Yes. So on cost cutting overall, I mean, 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 decentralize 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 these are the 2 biggest levers that we've been pushing and are starting to deliver with a specific program with very clear ambitions for this year and maintain the run rate after that. So that's the 2 big focus points.

And regarding your third 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 are -- we do see some slight recovery there, which basically confirm what we have seen in Q4 last year. Unfortunately, Nordics remains negative territories. We do not see any recovery of this market, specifically Sweden, which is still in a negative part. So that for us is that's the case today. No sign of recovery. We will see our plans or discussion with our customers tell us that maybe in H2. But so far in Q2, we don't see any big recovery.

The next question comes from Eric Lumari from CIC CIB.

I've got 3, if I may. The first one on the project in transmission you mentioned. So you mentioned some projects at the end of 2026. But regarding the project for which you are currently doing some quoting for the MI line related project. Could we expect some announcement before the end of 2026?

I got a second question on the Republic deal. You mentioned some value creation on the slide but when should we expect that the return on this deal to be above the WACC of Nexans? When do you expect to create value with this deal?

And the last 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 Nexans?

Okay. So I will start by the -- 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 midyear. So it will not be -- of course, it will not be end of the year. Hopefully, it will be much earlier. So target today is to have an answer by midyear of the result of this tender.

Regarding Republic, I will start the first -- your question again is the family, why we tend to sell the company. So the owner Ron is above 78 years old. And he will -- his willingness was to continue development of this business, joining force with a large group. That was basically his wish but he is ready to work with us the next 2 years up to end of 2027, at least. And we have also his son, which also has an active role that is 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 Republic. That was his main motivation.

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

The next question comes from Alessandro Cecchini from Equita.

Firs one actually...

Cannot hear any question.

Alessandro, we can't hear you.

Can you hear me?

No, we cannot hear. Maybe let's move to another question and then we'll come back on Alessandro just after.

[Operator Instructions] Alessandro Cecchini, your line is now unmuted.

We still cannot hear anything.

The next question comes from Scott Humphreys from Berenberg.

Can you hear me okay?

Yes.

Perfect. So first one for me, just on CapEx actually. So at the November '24 Capital Markets Day, you guided to the sort of EUR 1.2 billion of cumulative CapEx, '25 to '28, so about EUR 300 million per year. When we think about the sort of 70% of that sort of EUR 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 the composition of that remaining CapEx, that would be helpful.

Yes, sure. So the overall plan of EUR 1.2 billion 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 2 projects you mentioned will decrease significantly in 2027. And then we're buying an asset in the U.S. that is significantly invested. Part of the reason we're using 2027 as a reference year 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. And 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 and 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 2 years, clearly, 2026 will be more normative and normal. We have a strong Q1. We expect H1 to be 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 expand the capacity significantly because it's replacing a boat that we're currently leasing. 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 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.

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 3x 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 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 expert on this part.

Yes, Vincent Dessale speaking. Indeed, we still see a gap, of course, between the vessel that we can charter on the market. The multiple that you are indicated by 3 could be this one. But to be honest, it depends really on the size of a vessel. If you are looking for a vessel with large capacity, you will be in this range. If you are looking for a vessel with a smaller capacity, typically of 5,000 tonnes, it could be smaller. But again, for us, the key topic is to have EPC project with our own vessels in order to derisk the project and to limit the interface towards the customer. This is really what they are looking for.

[Operator Instructions] The next question comes from Sean McLoughlin from HSBC.

And I have a question just generally on the low-voltage U.S. market. I guess in terms of -- you said on the 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 smaller, more focused? Just a little bit of the lay of the land. And again, what kind of market share ambitions you have in the medium term in the U.S.

Okay. So basically, in the U.S. low voltage, you have mainly 2 players that I will not mention them but I'm sure you know them, that represent a big chunk of the business, maybe 2/3 of the business. Then you have a series of several companies the size 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 from Montreal for many years. So we have a good connection with them. Our ambition is continue to grow in the U.S. low voltage and medium voltage, by the way, both activities in the U.S. We like this market. It's a dynamic promising markets, high-growth markets with very interesting verticals such as data centers and others.

I will not give a specific numbers of share of wallet that we are aiming for because, of course, that depends on the conditions, depends on many elements. We want to be -- we want to be selective in the M&As. We want to make sure that what we pay makes a lot of sense. So -- but there are still a lot of opportunity in this business to grow our share of wallet in this market. We have been active in this in terms of pipeline. We are discussing with some of them, and that's an opportunity to grow, but we don't want to make stupid decision in terms of purchasing price.

Understood. That's very clear. And then in terms of, I guess, overall capacity in the market, this company, for example, is growing 30%. We're hearing of other capacity increases. Do you -- is your overall view that the U.S. 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, this -- the growth run rate of the cable low voltage and medium voltage in U.S. is growing fast, partly driven by data center but not only. So we do see that there is some -- and you're right, there is some ongoing capacity expansion with some of our colleagues. But for us, really is to remain very selective in the type of customers, selective in the product portfolio. This is -- I mean 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 deal of 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.

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 Nexans fundamentals remain solid and resilient. And through our transformation into a pure play electrification, we have built a robust model of value creation, which position Nexans as a key enabler of energy transition and a critical contributor to Europe energy sovereignty. On the external growth, we are very happy we could announce the deal today with our Q1 publication, demonstrating once again our commitment to our strategy.

I would like to thank you again for attending this call, and we'll hand over now to the operator for closing remarks.

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

Welcome to the Nexans' business deep dive. [Operator Instructions]

Now I will hand the conference over to the speakers, Julien Hueber, CEO; Vincent Piquet, CFO; and Vincent Dessale, CCO. Please go ahead.

So thank you, and good morning, everyone, and thank you for joining us today. For the ones who were with us earlier for the full year 2025 result presentation, welcome back. And joining us now, welcome to this Nexans business deep dive. This session follows the Capital Market Day we held in November 2024. There are 3 reasons why we wanted to have today an update of our Capital Market Day. The first is Nexans has entered into a new phase of leadership. Second is, since early 2026, Nexans has become a pure play electrification with a planned disposal of auto electric. And the third, the external environment has evolved significantly over the past 15 months, becoming more complex and more volatile.

Now that Nexans is fully focused on electrification with a simplified portfolio and a clear strategic positioning, we can fully leverage this model and scale what we do best. In this context, we felt it was the right time to step back and explain what differentiates Nexans and how our model allow us to adapt to a more demanding environment while staying fully aligned with our strategy and financial trajectory.

Over the past few years, Nexans has gone through a profound transformation. We reshaped the portfolio, simplify the organization and strengthen our financial foundation. Our strategy has not changed. This session today is to explain how we will intensify execution, how we scale what already works across the group and how we continue to convert electrification growth into margin and solid cash generation.

So let's now move to the today's agenda. I will start by setting the context where Nexans stands today after the transformation phase and why now is a good time to enter into a phase of intensification. Then part 2, together with Vincent Dessale, our Chief Market and Commercial Officer, we will then cover our 3 businesses: Transmission, Grid and Connect and explain the key levers we are deploying to intensify performance across the portfolio, building on the structural drivers of value creation in each business. Finally, in part 3, Vincent Piquet, our CFO, will come back to Nexans' value creation model and provide further insight into our financial trajectory towards 2028.

For this session, we will explain how Nexans turned electrification megatrend into value creation with discipline and selectivity. So as I mentioned earlier, today, Nexans is now a global electrification player. This positioning did not happen overnight. It is the result of deliberate and disciplined choice made over several years. This slide illustrates very concretely the portfolio rotation we have completed to support the strategic shift. On the top of the slide, you see the acquisition we have made to strengthen our electrification footprint. This transaction were highly selective and fully aligned with our strategy. In total, they represent around EUR 1.5 billion of sales and contribute directly to electrification focus.

Let's take some examples. Vincent will describe later in the presentation how fast we have integrated Reka in Finland and how we have been able to become the #1 in the Nordics, maximizing our grid capacity for these regions. As a second example, Air City in Spain is providing us today a brand-new industrial capacity that starts to contribute to the growth we see today to fire safety and data center vertical. On the bottom part of the slide, you see the divestments we have executed over the same period. It represents around EUR 2.2 billion of sales and divesting these companies took us a lot of time and resources, but the portfolio rotation is complete, and Nexans is now fully focused on electrification.

Overall, M&A remains a key driver of growth for Nexans and is at the core of our strategy. We have a strong and active pipeline of opportunities, and we will replicate our value creation model in the same business we integrate with the same discipline in execution, integration and value delivery. As I just mentioned, while we have been actively progressing on our portfolio rotations, one of the most tangible outcome in our transformation has been simplification and the impact it has had on our performance. Since 2021, we have significantly reduced complexity across the group. We now have much fewer industrial sites, much fewer employees, and we have managed an important reduction of our market segments to address as well as a division by 2, and we have divided by 2 our technical processes. This was not simplification for the sake of cost cutting. It was about restoring focus, accelerating decision-making and improving industrial efficiency across the organization.

As you can see, the financial impact has been very tangible. In 4 years from 2021 to 2025, our electrification adjusted EBITDA doubled, electrification ROCE was multiple by 1.2 and free cash flow almost doubled. This track record clearly demonstrates that the model of simplification works.

Today, Nexans operates with a well-diversified profile with a balanced contribution from our 3 core businesses, Transmission, Grid and Connect as well as a balanced geographic footprint. But our resilience is not only about diversification. It is very much about selectivity. We have positioned our group towards the most resilient market. We focus on segments where demand is structurally stronger, investment cycle are more visible and customer value, both performance and [indiscernible] prices. This applies across sectors, geographies and customer profile. We are highly selective in the vertical we address, the geography we prioritize and the customer we serve.

In particularly, we keep focusing on platinum customer where our differentiation, our expertise and our execution capability create the most value. So as a result, Nexans is positioned at the intersection of resilient markets, premium demand and [indiscernible] profitable growth. But before moving into the businesses, it's worth posing briefly on the broader context. So on this slide, you see a number of key indicators that illustrate the depth and the durability of electrification trends. The structural driver of electrification are stronger than ever.

Just let's take 2 examples in this slide. Power grids required massive reinforcement after decades of underinvestments, and the energy transition continue to drive new transmissions and connection capacity. Over the next decade, EUR 80 million -- sorry, 80 million of kilometers of minimum voltage will have to be produced and installed, and that's the equivalent today of the existing grid worldwide capacity.

Another example is the development of AI is driven by an unprecedented expansion of data center worldwide. This facility are extremely energy-intensive and require reliable, high capacity and resilient power infrastructure. To put this into perspective, data center are expected to increase their share of global electricity consumption from around 1.5% today to close to 3% by 2030. This is massive. And these investments are driven by technology, regulation and security of supply.

So if we step back and look at our journey in Nexans over the past several years, 3 distinct phase clearly emerged. Between 2019 and 2021, Nexans went through a restructuring phase. The priority at that time was to restore profitability and strengthen the balance sheet and fix the fundamental of the group. From '21 to 2024, the focus shift to simplification. With reduced complexity, reshaped the portfolio around electrification. This was about building a simpler, more focused and more resilient group.

Now as we enter the 2024, 2028 period, we move into a phase of amplification, amplifying profitable growth in electrification. The organic growth we have presented this morning for our 2025 results clearly demonstrate our capability to grow. But what is important today is that our positioning as a pure player in electrification will now allow us to enter into a phase of intensification. Now that the portfolio rotation is complete and that the group is fully focused, we are at a position to scale execution, replicate what works and deploy our value creation model with much greater intensity. Intensification is not a change of strategy. It's a mindset in the execution. It means building on what we have already put in place, doing things better at a greater scale and with more discipline.

Let me pause a moment on this slide because it's captured very concretely how we are moving into the next phase of our value creation journey. Intensify means scaling what already works with disciplined focus on repeatability. This is done through 4 concrete pillars that I will describe. First, commercial excellence. We have spent the full year 2025 to understand deeply, vertical by vertical what -- where the customer needs, the expectation in terms of innovation, technology and services. This is what we have called growth pattern. So we are now in a position to scale high-value growth pattern in verticals such as data center, fire safety, renewable [indiscernible] factories.

To do this, we have set a dedicated commercial teams to capture value across the full offering. The head of this sales business development is now part of our ExCom team. It gives the importance of this pillar. The objective is clear, increase the share of advanced offer, improve mix and strengthen pricing power. The second pillar is industrial excellence. This pillar is about to align the industrial footprint to renew requirements of our customer expectation.

Let's take an example. The expectation of our customer in data center, for instance, or in grid project has evolved. And today, their focus is to secure enough capacity in a very short period of time to fit with their schedule. Therefore, we are adjusting our model, which used to be local-for-local model to now a model called local-to-regional in order to mutualize our industrial footprint and answer positively to our customer expectation. This is how we will secure profitable growth in the coming years. At the same time, using Advanced Industry 4.0 on automation process will generate structural competitiveness.

The third pillar, operational excellence. This pillar is about scaling operational excellence across the group with a strong focus on cost competitiveness and organizational efficiency. We continue to deploy cost competitiveness initiatives targeting both direct and indirect costs while making the organization leaner and more agile. Shift that you know well is now -- is now amplified by AI, allowing us not only to improve process efficiency and accelerate decision-making, but also to enhance commercial effectiveness and profitable growth.

A good illustration of AI deployment is in our AI-based inventory modeling tool, which helps optimizing stock level in order to capture revenue growth while maintaining our cash generation targets. These initiatives will structurally improve our cost base, strengthen competitiveness and support consistent performance across all businesses.

I will now describe the fourth pillar, which is about M&A excellence. M&A is a key element of our strategy. Our approach to M&A is very disciplined and highly selective. But more importantly, our strength lies in how we integrate acquisition and turn them into value creation.

We ensure that the businesses we acquire are quickly integrated into operational model commercially, industrially and operationally using the same tool process and discipline, including the shift. This allow us to replicate our value creation model quickly, accelerate synergies and ensure that acquisition contribute to margin, cash and return, not just the growth. So taken together, these 4 pillars define what we call intensify. They are how we raise performance across the portfolio and ensure that every business progressively catch up with our best-in-class performer.

In the next slide, I will show how this framework applies very concretely to Transmission, Grid and Connect. So this slide captures the operational value creation model. At the heart of this model, you can see the 4 execution pillar we discussed just earlier. They form a common and robust foundation across the group. It is critical to understand that this framework is scalable, but not apply mechanically.

So let's take transmission example. In this business, value creation relies far less on M&A and much more on industrial and operational excellence, strict backlog selectivity and quality of execution. In Grid and Connect, the same execution framework applies but with a different balance between the pillars, placing more emphasis on innovation, commercial excellence and targeted M&A. This slide concludes the first part of today's presentation, our positioning, our strategy and how we intend to intensify execution.

I will -- let me now hand over to Vincent Dessale, who will describe how intensify will be cascaded to our 3 businesses.

Thank you, Julien. We will indeed spend the coming minutes to address our 3 segments; Transmission, Grid, Grid, which is the distribution of energy, electricity, and the Connect. In other words, the usage, the consumption of electricity. And we will share with you the fundamentals of these 3 segments, but more important, how Nexans leverage the structural driver of value creation, in other words, our recipe. And last but not least, how Nexans will intensify this structural driver in the coming years.

So let's start by Transmission. Transmission, it's a worldwide market, first element. It's a long-cycle business, good visibility, supported with very strong needs in terms of electrification. Julien spoke before about renewables, interconnection, energy transition. So in fact, the question is not whether the market is there. The question is how Nexans capture the value of this market and do so in a disciplined and repeatable way. And the first element is clearly the quality of execution.

You are managing in this activity a set of projects on multi-years execution. You have to organize the sequence of all these different projects like a little bit, a big puzzle, if I can say this. So the quality of execution is a key and measured element. Of course, you have to do it with discipline coming back to this sequence, this puzzle. And you have also to do it with agility because in this business, you can have, from time to time, some adjustment to be done due to the execution of the project. And this ability to deliver safely on time and at scale is clearly a key differentiator on the market.

The second is barrier to entry, and I will illustrate this point later on. The third one is about selectivity. Julien mentioned it. We have a chance to have a significant pipeline of projects, and we are very selective in the project that we try to win, taking into account the terms and condition, the profile of the customer, the technology and how it fits with our assets. The third one -- the last one, sorry, is mix improvement. You know that we had in the past a certain number of legacy projects. This legacy projects are step-by-step leaving the backlog. And we have now in front of us an increased share of, I will say, good and healthy project. And this evolution, the 3 factors that I've mentioned plus the mix improvement are seen in the evolution of our performance.

You have seen this morning, and we share it again here today. We have this evolution steadily since 2023. And we are clearly -- thanks to the visibility that we have on our backlog, which is a healthy backlog, a trajectory where we are very confident to continue to improve this performance.

Coming back now to the barrier to entry. Here, this point is quite important. Nexans has been, during many years, having a very strong record in terms of installation length, in terms of depth of installation, in terms of tension. We have -- we are doing this, thanks to our teams, our experts, the know-how that we have. We are doing this, thanks to the state-of-the-art assets that we have in terms of manufacturing, in terms of testing, in terms of installation, in terms of protection capabilities. And all these elements give us a technical leadership acknowledged by our customers.

We were some years ago, for example, the first supplier to deliver the first dynamic solution for the first floating offshore wind farm in the world. And more recently, maybe you have seen in our press release, we have set a world record in terms of installation, in terms of depth of installation with 2,150 meters in a project called Tyrrhenian Links in Italy. And what I want to highlight is that this achievement, they are not symbolic. They represent Nexans' know-how and expertise. They represent our capacity to undertake complex projects, but deliver them with reliability. They represent, in other words, the trust of our customers.

Under intensify, we will be scaling this model. And the coming Electra vessel, which will be delivered in the second quarter, will continue to help us to enhance this technological leadership, being able, for example, to lay 4 cables simultaneously, helping to improve the productivity and giving us a better flexibility in the execution. Now to conclude the transmission part, if we look forward, we have 2 elements. We have a solid backlog, and there is also a solid pipeline, which means that this business, basically, you need to manage at the same time, short term and medium long term. The short term is all about agility. So what I say before, you have plenty of projects. This project can have some request or change of sequence. You can have, for example, a bad weather when you are doing installation. So you have to rearrange your organization, your schedules.

And this agility give us also some opportunity to integrate in our overall activities, some inspection, maintenance and repair activity. In other words, this agility help us to capture high-margin opportunities. And at the same time, we have to look medium, long term, which is about preparing the next wave of order intake, which will be the [indiscernible] our factory starting '28, '29 and beyond. And this, again, we will do it, thanks to this selectivity, this discipline and somehow, we will try to narrow the pipeline in order to make the right choice. And that's also the chance in this business is that the pipeline is very strong coming from the different usual sources of market.

More or less, you have more than 120,000 of kilometers of cables, which are expected to be installed between '26 and 2040. In this 120,000, we consider that 95,000 are addressable according to our asset, our expertise and can be converted in a very high-quality backlog. So under intensify, we will continue to strengthen this approach, combining efficient processes, quality of execution, commercial agility, 3 reasons for what our customers select Nexans for the most complex project. And under intensify, this visibility, this selectivity will constantly translate into margin and cash and not only volumes.

And now I will turn to Julien, who will go through the grid business.

So thank you, Vincent. Let me turn to the Grid part. So first of all, I really like this business and the turnaround that the team in Nexans have accomplished over the past years. And I'm even more excited when I see all the potential looking forward in the grid business. Let me remind you where we come from. Not so long ago, in 2021, 6.7% adjusted EBITDA margin to now more than 16% in 2025. This is a very significant step change in profitability, driven by disciplined execution and portfolio optimization, and that gives us the confidence of our strategy.

Grid is structurally attractive, cash generative and relatively low in terms of capital intensity. It benefits from a long-term trends linked to grid modernization and the massive deployment and development of renewable that we are seeing since several years, and that will continue.

But now let me explain how Nexans capture this value and why the grid is particularly well positioned going forward. First, the scaling of innovation. Grid is a business where value is driven by high added value solutions from advanced cable design to recycling offers. Nexans is scaling innovation across all its grid business across the world.

Second, regionalization. We are regionalizing our industrial footprint to respond to stronger demand linked to grid modernizations. The proximity with customers improve our response times, reduce complexity and enhance service level, all of which support margin and execution quality. Third is the pricing power. Thanks to our ability to address complex customer needs with innovations, customers are willing to pay for performance, credibility and differentiated solutions, not just for volume.

And finally, deployment of shift, our SHIFT program plays a key role in Grid by ensuring that best practice are consistently deployed. It allows lower performing units to progressively catch up with best-in-class performance, improving the overall margin of these plants, discipline on execution quality. So over the 3 years, several of our grid units have massively improved their profitability using these 4 drivers.

In Grid, the value creation is driven by 3 main levers, and I will describe the 3 of them. The first lever is basically the expansion of share of wallet with grid operators. In Grid, expansion is driven by multiyear framework agreement with our DSOs, which provide visibility and recurring volumes. We tend to see more and more of the extension of duration of these framework agreements. A very good illustration of this is the recent 7-year agreement in the framework we have signed earlier in January with Enedis, the French DSO.

More than EUR 600 million contracts support the modernization and expansion of the medium voltage network. We leverage our low carbon leadership, industrial backup and competitiveness to extend and secure the duration of these agreements and capture a significant additional volume over time. Second lever is the expansion into new verticals such as [indiscernible] renewable or data center. If I take the example of a data center, allowing us to capture large-scale projects and benefit from a booming market. This vertical will generate a meaningful growth and value driver for grid in the coming years. We have the same trend for project in renewable. Both these 2 elements are important for us.

Third lever is the continuing expansion of innovation in accessories. Accessories are a fast-growing segment across geographies, illustrating the strong need for our customers for more added value solutions. We have developed solutions like EasyJoh, now powered by AI, significantly improving reliability and reducing installation complexity. This innovation strengthened differentiation, customer preference and pricing power. This is a type of solution that brings more value creation over time. Taken together, these 3 levers explain why and how Grid scales value creations by increasing share of wallet with existing customers, by expanding high-growth verticals and by innovating to deliver best-in-class customer experience.

So let me start with the objective in Grid. Our ambition is to significantly increase the share of advanced offer in our revenue mix. By 2028, around 40% of our grid revenue will come from advanced solutions. This reflects a deliberate shift towards differentiation of customer experience and high-value creations. Second, let me explain how we will achieve this shift. In the business, value creation is driven by our ability to deliver customer experience such as best-in-class lead time or training customer workshops for accessories installation. Beyond the cable itself, Nexans leads low carbon offer with recycled aluminum in order to reduce up to 50% of the CO2 emission. This is already happening in some parts of the world with our customers.

And finally, let me highlight how we will intensify this model. We scale advanced software through mutualization across business units, ensuring that innovation developed in one area can be deployed efficiently across the grid portfolio. And we also rely on dedicated what we call them commercial SWAT teams to support complex tender and accelerate penetration of advanced solutions with strategic customers. Where relevant, targeted M&A complement this approach by adding specific capabilities and accelerating the rollout of our high added value solutions. So under intensify, our focus is to scale this approach so that the shift towards advanced solutions translate into margin improvement and long-term value creation in Grid.

Let's move now to Connect, Vincent.

Yes. Thanks, Julien. I will continue with Power Connect. And for this business, also you know it, short-cycle business, primary local market with a cash flow generative profile and quite limited capital intensity. But again, with a very strong dynamic supported to the electrification of our day-to-day needs. We see all of us in our day-to-day that we are increasing our consumption of electricity, could be, of course, the electrical vehicle, but could be also the day-to-day in our different activities.

And here, I would like to start by a key element, and I would like to highlight that Connect is not only a commodity business, something that we heard on a regular basis, and it's not true. Our customers and the customer of our customers because in this market, we go often through distribution company. What they are looking for is not basic cable. They are looking for safety standard. They are looking for energy efficiency. They are looking for compliance with regulation, and they are also looking for productivity when we do the installation of the cables, which means that you can bring to this market advanced offer with higher margin profile.

And this is clearly the first element of value creation for Nexans. We have worked a lot on this, and I will give you some examples in the next slide. We are scaling innovative and high added value solutions. The second is leading vertical technology. Julien mentioned in Grid -- some elements. When we speak about verticals in low voltage, we have also here the data center vertical. We have also the fire solution. We have, for example, the premium offer for electrician.

These verticals that we call internally growth pattern are also an area that we have identified, and we will scale our solution in these verticals, which are providing a better margin, a higher margin profile. The third element, and you know it also very well, this is our backbone, the shift methodology where we are using not only for integration, but also to move our lower performing unit progressively to catch up with the best-in-class performers. We have mentioned already in some discussion with you that we still have a gap between the best-in-class and the lower in class, if I can say this.

The last element is for sure, the replication of this model through the M&A acquisition, and Vincent will give you a concrete example with the acquisition of Reka that we did 2.5 years ago in Finland. Taking together, this level explains why Connect is a business where value creation is progressive and scalable. And if we look to our evolution of EBITDA over the last years, we came from 8%. Now we are in the range of 12%, and we are able to do this, thanks to this discipline in the transformation using the different levers that I have shared with you.

Now I would like to give you a concrete example of value creation, and I have chosen the MOBIWAY case study. I could have selected other advanced offer like the cable loop, which is a specific offer dedicated to sustainability and recycling. I could choose also the Protect, which is our fire safety range of product or the [indiscernible] solution that we use in certain geographies.

But let's move to the -- let's focus on the advanced offer of MOBIWAY. What is MOBIWAY? Basically, it's innovation which started initially in France some years ago. And step by step, we have completed this range of product. It's all about supporting the installation of cables. And you can say why we have so many solutions. The rationale is quite simple is that you don't install cables in buildings in the same way all over the world. The structure of the building are different between Europe, Australia, Nordics, Colombia, just to give some examples. So we design solution according to the pain point of the end users. And this gives us this full scale, this full range of solution that we are deploying all over the world in a very scalable and reputable way.

And the last one that I want to mention is the one coming on MOBIWAY, what we call [indiscernible] Connect, which is having a layer of IoT. And here, we will bring with this solution, additional services through apps to the end user, allowing them to calculate the remaining length, allowing them to interface their orders with the web shop of our distributors. But the most important is probably the point regarding the dynamic of this repeatable growth model. If I take MOBIWAY, since '21 up to now, this range of product has delivered a strong growth with a double-digit CAGR on these 4 years, which is, of course, significantly higher the CAGR of this segment.

So this development of advanced software, that's the way, of course, to deliver a better user experience, which, by the way, gives a stickiness to the end user to our solution. You have a kind of recurrent sales and it's improved the mix value and scale our model all over the world.

In order to conclude Connect, let's see how we will continue to enhance this positioning in the business. Our mission is very clear. By '28, we want to have 30% of the Connect revenues, which come from this advanced solution, which means differentiation, pricing power and profitability. And we will do this, thanks to 3 elements. First one is customer experience. I have explained you in the previous slide, the MOBIWAY range. So it's all about solution, could be also supply chain solution, could be also services through digital platform. So quite large possibility of activities.

The second is, of course, technology. I gave the example of the fire safety, for example. And last but not least, the life cycle solution where we create recurring revenue and we create value over time. In other words, what we are doing is that we are more and more customer and customer-centric. In other words, Nexans is acting for sure in a B2B business, but we are thinking B2C in terms of solution and in terms of customers. And this unique position, we will intensify it in the coming years, first of all, through the competitiveness by specializing our industrial footprint, thanks to the previous acquisition and the coming acquisition that we will do.

We are creating more and more regional organization in terms of industrial footprint. We are creating also a regional supply chain hub in order to be faster in the delivery to have shorter lead time to our customers. And this ensure that this advanced offer are not only differentiation, but they are also competitive. And at the same time, we will scale, as I said before, these advanced offers across geographies and advanced offer through the targeted acquisition.

So taking together, this is how Connect will continue to be premium in bracket and bring competitiveness. That's basically the overview of the 3 businesses that we have shared with Julien and how we intensify value creation across them.

And now let me now hand over to Vincent Piquet, our CFO, who will take you through this execution framework under, I will say, a financial view and how we will move towards '28. Vincent, the floor is yours.

Thank you, Vincent. So in this section, I'll spend more time on how we're going to deliver our 2028 trajectory. I'll focus first on our value creation engine. The center of the slide, as you can see, is what Julien explained earlier. And it's the engine that we use to drive operational performance through the shift approach, the application of differentiated processes and focus on each of our businesses. And this is really the core of the discipline we apply. To feed that engine, on the left side, we fit it with growth.

First, selective organic growth. We focus not just on volume, but on value and really trying to capture the most value-added parts of the businesses and the geographies and the businesses we're in. And then second, we do targeted M&A to accelerate that growth on top. Once you put that growth into the engine, the first outcome you get is adjusted EBITDA expansion. That expansion is the result of the discipline, the operational discipline we put into the engine, and it translates into pricing selectivity, rigor on the industrial aspects and the focus on value creation at every step of our processes.

And then the second outcome is the generation of cash flow. Obviously, cash is critical for us, and we're very focused on the expansion and acceleration of the free cash flow generation. That cash is then used on the right for our capital allocation. First priority for us is targeted M&A, and I'll spend more time on what we prioritize. Shareholder returns. We've had great total shareholder returns performance over the last few years. And then obviously, growth CapEx as we reinvest into our selective organic growth through the expansion of our production capacity and the investment in our plants.

This model in total is what drives the overall value creation in Nexans. And it may seem a little bit generic, but when we look at the specifics of how we apply the shift methodology and how we modify the intensity of each of the levers and selectively apply the focus on different parts of the business, it makes it unique, and this is how we transform growth into EBITDA, EBITDA into cash and cash into long-term value creation with Nexans.

Let me zoom in a little bit on target on the M&A. We have a strong M&A focus. It's an essential part of our story. And now that the portfolio rotation and the divestments is completed, the brain space that this management has on the ability and the focus to do M&As going forward is only going to step up. We have 3 clear priorities in our strategy around M&A. The first one is consolidating and reinforcing our existing footprints. And this is where we're looking for bolt-on acquisitions that help us grow and accelerate in markets we know well to reinforce our positions and continue to expand.

Second, it's expansion to new geographies. We're clearly looking at different markets around the world where we're not present today and we are looking to expand. There are a lot of attractive geographies in the U.S. and elsewhere that we're looking at today. And then the third is new technology, new expertise to our portfolio. We have now a global size and any new technology and accessories we can feed into that global network and global sales operation, we can accelerate growth of start-ups and small technology companies that can reinforce the offering that we provide to our customers.

And most importantly of all, it's the ability to integrate the acquisitions that also makes a difference with Nexans. We have a proprietary approach derived from SHIFT. And we are very, very focused on successfully integrating the acquisitions we make to bring them into the Nexans family and bring them to the best levels of the Nexans performance in terms of value creation. And in fact, let me take one example, a very strong example that was referred to earlier today in the conversation. Reka is a business in the Nordics, that was a very strong business, very good business, but clearly underperforming its potential. What we did is, from day 1, apply our SHIFT methodology, bringing rigor and discipline to pricing to operations and really focusing on the value accretive parts of the business.

Being part of Nexans gave Reka higher purchasing power, obviously. And we also focused on optimizing its footprint going from 3 plants to 2 and refocusing the priorities in terms of the industrial operations. All of that gives us a business that in 3 years, 2 years, doubled its EBITDA, a real success story. Reka inside the Nexans family is now one of the best-in-class in terms of performance, and we're now #1 in the Nordics, thanks to this acquisition. This is not just an exception or a good story. This is part of our process and the rigor we apply to our acquisition. This is one more data point and a great track record in the number of acquisitions that we've made over time.

Now if I step back and bring this back to our financial trajectory. This is how we see and we recommit to achieving the CMD 2024 commitment for 2028 EBITDA. There is 3 -- our 3 businesses will contribute. The first one is Power Transmission. The growth of EBITDA in transmission is supported by the great backlog that we have. It's about backlog execution, quality of the execution of that backlog and continuing to capture for the future beyond 2028, the commercial deals and the new volume that will come through.

For Grid and Connect, we see a normative underlying growth rate of these markets that will sustain the EBITDA expansion that we need to achieve. The focus in grid is really industrial excellence as we shift from a local-for-local to a local-for-regional approach as these markets are evolving fast, the demand is high, driven by, in part, data centers and other verticals that we focus on.

And for Power Connect, a lot of volume as well, focusing on the mix premium and the operational excellence, and we're very focused with specific initiatives on driving the competitiveness of that business unit, integrating the acquisitions and driving into the next level as we continue to improve. And for both Grid and Connect, we'll obviously focus on targeted M&As, bolt-ons, geographic and accessories, as I mentioned before, to juice up the growth and accelerate things even faster and provide the right level of increase in our M&A profit rate in each of the business units. This road map is very clear for us, and we are very confident on our ability to achieve the 2028 objectives. And that's why we're able to reconfirm the CMD 2024 guidances on all the different levers.

And with this, I'll pass it back to Julien for the conclusion.

Yes. So thank you, Vincent. So to conclude, so let me take a step back and put everything into what we discussed today into perspective. What you have seen is, first and foremost, the continuation of the strategy. Nexans has been on a clear and constant path for several years now, focusing on electrification, prioritizing technology and selectivity and building a model design for long-term value creation.

Today, Nexans is a pure electric player, simpler, more focused and structurally better positioned than ever before. We have completed the portfolio rotations, strengthened our foundation and built a resilient diversified platform across Transmission [indiscernible] Connect. This gives us clarity on scale. And this is why now we call it and it's time to intensify. It means intensifying selective growth through commercial and M&A excellence and intensifying our competitive edge through industrial and operational excellence. We enter this next phase with strong fundamentals, a strong financial structure and a clear framework to convert electrification growth into sustainable performance, strong cash generation and long-term value creation.

So thank you for your attention. That ends this first part of the presentation, and now we are happy to take your questions.

[Operator Instructions] The next question comes from Sean McLoughlin from HSBC.

Just a question on integration. You've talked about speed of integration of M&A as being key. Maybe just coming back to LTC, that looks like it's been a drag on your margin in '25. Can you explain maybe what's happened there, what you've learned from this process? And are there other integration costs that we should look out for in 2026? That's my first question. And then just the second question quickly on data centers. If maybe you could give us your current data center exposure and the growth outlook for that segment.

Okay. Thank you. So I will start by your first part of the question regarding integration, speed of M&A in general , and you asked a question specifically about LTC. LTC is doing very well. I mean we are extremely satisfied with this integration phase. You understand that the scale of LTC is bigger than [indiscernible] we just explained. So it takes more time, and we do that from the start.

We are very well on line with all the different steps of integrations, purchasing power, shift methodology, basically quitting the, what we call, the bad cholesterol of customers and implementing in terms of innovations, new product, new packaging into different markets. So we are completely aligned. And simply, the scale of LTC has a different impact compared to others. That's why we have mentioned that this morning. But we are completely in line with our integration plan that we said.

And by the way, we didn't mention that there is other type of acquisition. We just explained Reka, but Centelsa, if you remember, we did in 2022, we have a similar result of Reka. So we have a recipe. We have a model. We do it in a disciplined manner, and we are extremely satisfied with the way it goes with LTC. LTC just starting, but the way it goes with the Italian new acquisitions.

Regarding your second question, I will start maybe Vincent, if you want to add -- but data center is -- it's a very interesting market. It's very interesting because it basically changed -- it forced us to change our model if we really want to be in this market, and we really want to be in this market.

The size of the orders, the magnitude of the size of orders, the speed to reply, the shorter lead time are different than the usual other type of verticals. It's a different business model. And therefore, that's why it give us the willingness to change our model from local to regional level because today, when you are winning a project and we are winning some large projects in data centers, you cannot just have one plant dedicated to this. You need to put in perspective a series of different manufacturing units. That's what we call it mutualization in order to be able to answer positively first in terms of capacity but as well in terms of shorter lead times. So you need these 2.

And to do our exposure of data center, it depends really from geographies. Typically in the North America with our [ Canadian ] operations, it represents quite a high number of our business in the connect space, and this is growing extremely fast. It's -- I would say it's more smaller yet in Europe, but we see this coming and we are preparing regional organization to really enjoy this booming data center that will come in Europe within -- it's already there, but it will grow extremely fast in the next 2, 3 years. So our exposure is depending on geographies, but I consider that it will become a key element of our growth looking forward.

And maybe to add why it's difficult to answer precisely to your question is that, as mentioned by Julien, you have, I will say, the large-scale projects where we go directly with the contractors, the developers. So here, we can size the percentage, but you still have a major -- a big part of the business, which is going through distribution. And yes, clearly, we don't track and trust the sales of this product because it goes through the distribution organization.

But indeed, as mentioned by Julien, we are prepared -- we have prepared this offer because now data center is low voltage, so it's connect product, but it's also grid product. And for some major hyperscale, it's also high-voltage product. So that's why we have to go through this overview.

The next question comes from Chris Leonard from UBS.

Just following up on the sort of local to local and then going local to regional. Presumably, if I understand that correctly that, that should have some sort of synergy benefit and margin tailwinds if you're reducing like -- across the plants, if you're reducing production and doubling production across different geographies to then supply regionally. Have I understood that correctly?

So first of all, the local organization we used to have before has a clear benefit that we will keep, which is the entrepreneurship, the closeness to customers that we will keep for sure. Now moving to regional, so local to regional, it means that we will basically integrate larger business units in order to mutualize faster in a more efficient way, all available production capacity.

And for sure, it has a few benefits. The first one is clearly the capability to answer quicker and to take faster or large orders in some verticals that we see them extremely active, grid, for example, but as well as in the connect space. It will give us an opportunity also to be much more competitive because we will be able to select the best plants according to the type of portfolio of product that we will address in each of the tenders.

So it has several benefits that we'll capture. And then we will -- it will also give us an opportunity to scale faster different technology that we have between plants to plants. So there's several, I would say, financial benefits in terms of competitiveness as well.

And you have another element, which is critical in this evolution, local to regional is that we take into account the customer needs because at the end, to create value, you need to take into account the customer experience. And in the case of the grid, for example, our local customers are more and more interesting to have backup solution, what we call internally sister plant.

So we qualify different plant for one customer, which give, again, as mentioned by Julien, backup, but also short answer when it's needed and flexibility. And for connect, most of our customers are also moving now in a regional organization, so which means that we are somehow mirroring the organization in order to be the same scale in terms of discusion and in terms of solution to the market.

Maybe I will add also one more thing is we have done a lot of progress in terms of complexity reduction in terms of SKUs on customer level in the past several years. Moving to regionalization in our industrial footprint will also give us the capability to specialize further our industrial footprint. I will give you some example.

Today, in some plants, I will take some example in France, but could be the same in other countries. We are producing a large portfolio of all the products for this specific country. Now moving to regionalization, we'll be able to further specialize the sites. One will be specific for, let's say, fire safety because it has the best fit in terms of industrial capabilities. And the one will be more specialized for, for example, solar markets. And that will drive competitiveness.

And maybe following up on Connect and just thinking about the margin evolution into 2026. Obviously, this year was pulled down by a weaker second half, but you commented that you're very happy with [indiscernible] and how that's going on with the integration there. And equally into the second half of the year, you expect European recovery. So what sort of level should we see in terms of margins on the top end? Obviously, last year, 2025, they reduced versus where consensus was. But should we be thinking you climb back towards sort of the high 13s levels, like 13.7% upwards as it was in 2024?

Yes, I'll take this one. So we don't really give specific guidance at that level, but what's for sure is that the underlying benefits of all the work that's happening on LTC and others will drive benefits. The part that will -- we don't really control is obviously how fast will the Europe and Nordics market kind of start to pick up again, and that can have a mix effect that will drive the number that you're looking for as well as some of those geographies we talked about Oceania and Australia in 2025. It remains to be seen what will happen in 2026.

But all the work we described in terms of operational efficiency, scaling up this mutualization, the specialization of the plants, all of that will drive an underlying benefit in terms of profitability, and we hope to drive that all the way to the end and to show the strongest possible improvement next year.

And I think to add, it's what also we said in the session this morning on the result 2025, despite indeed this evolution of margin, what we call internally the best-in-class, they have not moved in terms of performance. So we still have, I will say, the best-in-class in Nexans, which are the ones which have applied all the recipe, if I can say this. And this one has been very resilient in terms of percentage of EBITDA, which give us confidence in our model and our capacity, as mentioned by Vincent, to scale the new entrants, the newcomers to the family and the one which are currently under, I will say, some pressure like Oceania mentioned this morning also.

I think let's not forget that in 2025, the European markets in residential was a little bit challenged. I think everybody understand this. And that was basically putting some pressure on some of our businesses. We start to see some progressive recovery, some signals of recovery in Europe that should help us also in the year '26.

And sorry to labor this, but last question from me would be maybe over to Vincent on the solutions side saying how focused you are on selectivity of contracts. And clearly, at the moment, the market is relatively well booked out for your competitors, but you have availability in '28 to '30 for slots or you've also suppose this year in '26 got some MI availability after the rescheduling of GSI. So how are you feeling on the pricing for these contracts? What kind of color can you give on sort of the backlog margin development that you could see versus what's currently in the backlog?

You have several elements to answer to your question. The first one is that the backlog is mechanically healthier year after year because you have this legacy project, which are exiting the backlog. So by definition, we have a trajectory which will continue to go to high teens percentage of EBITDA. So that's basically the first element with the actual backlog.

When you look after to the pipeline, it's true that we have some capacity available starting '28. I think here, there is no big change because the customer on the market, the one we are currently working are the same one as the last 20 years. And hopefully, I hope they will be the same one for the next 20 years, which means that we have in front of us experts. We know what are the technical content. And basically, here, we come back to the selectivity, what I explained in this session.

Nexans has a capability to take high technical content project where usually brings more added value because they are more complex. And when I look to the pipeline, typically what Julien said this morning, you have the MI project to come. This MI project is, by definition, very ultra-depth technology, so usually coming with indeed a good margin compared to the average of this business.

And when I look to the XLPE part, so mainly the offshore wind farm, here, you have a little bit of different type of project. And that's why here, again, we come to selectivity. You have some projects in the pipe where you have typically high tension, long length. So in other words, offshore wind farm far away from the cost. And this type of project, that's the one that we try to select because we know by definition that we are bringing more added value in the pipeline.

So, so far, I would say we don't see, I would say, negative element in the pipeline, but we have exactly the right type of project to select and continue to bring to the backlog healthy performance in terms of EBITDA and good profile in terms of cash.

The next question comes from Akash Gupta from JPMorgan.

So my question is on your 2028 target. So when I look at Slide #28 and let's say, if we take the midpoint of 2026 guidance that doesn't assume any further M&A, and we are at EUR 770 million, and we are aiming for EUR 1,150 million, so approximately EUR 400 million kind of increase over next couple of years. Can you give us how much contribution you are expecting from M&A and how much is organic? So for us, then it will be easy to figure out what could be the organic increase? That's the first one.

Thank you, Akash. I won't give you an exact split. But for sure, we see a path from an organic standpoint to get to a very strong level, and we are using M&As as a way to give us comfort and accelerate the growth. So I would say we need both, and it also depends on the environment and the growth in our markets, which over the next 3 years can be variable. So we're very focused on M&As. It's a key part of our story, and we've been doing quite a few in the past, and we'll continue to be at the right level.

My second one is on a couple of data points that you mentioned in Grid and Connect. I think you said about 40% of segment revenues in grid will come from advanced offering in '28 and for Connect, that was more than 30%. Can you give us some reference baseline for 2025? What was the starting point or if you have for 2024, so we can compare what sort of growth you are aiming from these categories?

So I will take this one, Akash. So basically, so these targets are new that the same target that we, if you recall, announced during the November '24 Capital Market Day. We are, I would say, halfway. So we still have 3 years to go, '26, '27,'28. We are halfway. So we are quite well advanced in this ratio. I would say, slightly more advanced in grid Connect.

Hence, you see also the level of margin that we have in grid and that we have reported this morning for 2025. So accessory is part of it, the way the type of, let's say, offers we are doing with accessory is also reinforcing that. So a bit more halfway, I would say, without giving you a precise number because it's, of course, depending country to country, but well positioned, slightly ahead in Grid and Connect.

And my last one is on data centers. So I guess the market is quite excited about U.S. data center opportunity given we hear from other companies that U.S. is seeing by far the highest level of growth. When we look at your footprint, you have some gaps in U.S., but you have very strong Canadian footprint. Can you elaborate like what kind of opportunities can you address in the U.S. through your Canadian footprint? Or will this be an area of bolt-on acquisition to get some exposure down the line?

I think you're right, Akash, for sure. So we are already addressing some of the data center market in the U.S. from our Canadian location. So it's already working. But to go faster -- to grow faster, and this is our ambition in these verticals, adding a footprint in the U.S. will for sure help, and we are working on it currently. But for sure, this is -- Canadian are really in the driver seat today. And when we announced the -- not so long ago, last December, the closing of Electra is really to fit with this market not only, but it was a big driver was to go and develop and grow ourselves and take the benefit of this segment also in the U.S. from our Canadian operation, including Electra.

The next question comes from Jean-Francois Granjon from ODDO BHF.

Yes. Just a question regarding the M&A. You mentioned that it remains key for the company. And you mentioned the U.S., the North America. What do you expect in this region? Do you expect -- are there lots of opportunities in this market in which segment, Grid and Connect? And what about the valuation? I think that the pricing is quite high in the U.S. So how do you appreciate that? So could you give us some more color about your strategy for the M&A in North America and more specifically for the U. S.

Sure. Thank you, Jean-Francois. I'll start. And so essentially, you're right, we're focusing on the U.S. We see a number of opportunities there. There are a number of acquisitions we could do that would be a perfect fit for us in terms of our track record at integrating and bringing them scale, bringing them scale of purchasing, scale of offering. So the market is quite wide, and we're pretty confident that we'll be able to find opportunities soon.

The focus will be Grid and Connect to specifically answer that part of your question. And the last thing in terms of the multiples, you're right, multiples in the U.S. tend to be higher, but also profitability, and that's driven by profitability. So it's a bit of a chicken and egg. And we're aware of this. We're looking at it. That's something that makes sense in terms of strategically and driving the right level of synergies and scale further down the road. So multiples will be higher, but with it's right fit and the right target, we think it's worth the investment.

The next question comes from Eric Lemarie from CIC CIB.

Yes. I got a first question on CapEx. You mentioned in one of your slides the regionalization of your industrial footprint. Does it imply some additional CapEx to be done? I mean in general, in terms of CapEx, could you give us maybe an update on what we should expect in terms of capital expenditures going forward? And has it changed since the last Capital Market Day?

Okay. So one of the drivers of regionalization is also to maximize and utilize the full industrial footprint we have. So when you regionalize an industrial footprint, you tend not to generate any CapEx. You don't need CapEx for that. This is exactly the opposite. You are maximizing all footprint available in regions for all different markets. So regionalization will not require specific CapEx.

Then regarding the looking forward CapEx, I think you know that in 2026, we have to basically finish our strategic CapEx around transmission. You know that the [indiscernible] capacity expansio with the TenneT project is ongoing in 2026. So we should be reduced by '27. The boat, the third vessel that we have for transmission, we will receive it by Q2. So that will be also ending.

So looking forward, there will be less strategic CapEx for transmission, as we have said, and that's exactly we are aligned with what I said, I think, during the last Capital Market Day in November '24. But we will, let's say, refocus more on Grid and Connect. And [ regionalization ] does not -- will not cost anything. It's just maximizing the already industrial footprint we have. And also the orientation are getting industrial excellence is also a way to maximize the output, better speed, less scrap level, higher quality and so on. That's also a way to generate more output with existing machine we have.

So is it reasonable to expect less intensity in terms of CapEx relative to revenues in the future for the group as a whole?

2027, I would say, yes. We have not yet done the full exercise. But for sure, there will be less CapEx in transmission because now we need to basically use the capacity we installed with double capacity in Ireland, the double capacity we'll have in [indiscernible], the third vessel. So now we have already spent some CapEx, time for -- to maximize the return, that's the focus. So overall, yes, there will be some kind of reduction, but we have -- we are working on it. And I, of course, cannot give you an exact number today.

That's very clear. I've got a follow-up one on M&A. So you mentioned your ambition in M&A. Could you give us maybe a target in terms of leverage in terms of net debt on EBITDA? What could be your maximum ratio -- maximum acceptable ratio in terms of net debt on EBITDA?

Yes. So that's it's an important element, but it's not what will decide what acquisitions we make. We want to stay in a normal leverage for the kind of rating we're at and the size of our company. So we'll be prudent, but we have ample capacity and headroom today to actually do quite a bit. Our balance sheet today, as you saw, is low leverage and is underlevered, I would argue. So we are going to use that firepower on the right targets. And then we'll keep the leverage in total within what's acceptable in the market today for a company our size and our rating.

Okay. And if I may, can I ask you a last one, just for precision on your Slide #6 or maybe I missed something during your presentation, but you've got a split on the right of this Slide 6 of your 2025 standard sales by end markets? And how should we read it? Should we consider that the larger part correspond to critical buildings, I am right? Just like to have an idea of your exposure to data centers, grids, et cetera, with this chart.

So no, it doesn't mean that it's not in the order of magnitude. So we decided not to give precise split of the market, so you cannot use it as -- in the order. It's not to be related. The big part of us is clearly a grid business. It's a large part of the business. And then you have inside the different elements. But you cannot read it this way.

The goal is more to show the diversity of our revenue sources in our markets, which makes our profile more resilient. So...

The next question comes from Lucas Ferhani from Jefferies.

So I'll have 2. Maybe we'll start with the first one. It's just on the SHIFT kind of model. Obviously, it started for a few years now. Do you have any numbers to give and maybe how much is left? Let's take out the recent deals that have made where you're working on getting them to kind of best-in-class. How much is left of maybe the legacy business in Grid and Connect that still needs to go towards the best performers? Because already quite a bit of work has been done under kind of the previous management team. So just to see how much can that move the needle still?

Okay. So I will start to answer to this question. So yes, indeed, we are deploying the SHIFT methods since several years across different organizations. What -- the way we did in the past years was really to basically send a team of 6 experts for, I don't know, several months, deep diving with the teams detail by detail and really doing a lot of crunching of data, putting in place price engine discipline and then support the team to transform the business and then drive the show afterwards. And then move the team to a different country or a different organization again and again.

When you do this firepower, it took us some time to do it because you don't have 200 people doing this. I mean it's specific teams doing one by one. What is new here is that we are deploying a SHIFT AI. So what does it mean? It means that now systematically, without sending a team on site in each of the business, we can have, and this is what we are currently expanding, we can have automatic online constantly a capability to detect if the business is moving in the right direction, is following the right price engine, is really pricing up innovation and so on and not adding complex business, complex product, complex customers.

So using the AI, basically, it's an accelerator in order to cover much faster all the different units and countries. We have -- and you know that because we have communicated quite a lot in the past years about how we cluster each of the business with innovation driver, profit driver and then core performer. I would say, let's say, half to 2/3 of our business are already covered by this and 1/3 needs to be, let's say, developed and pushed on.

Every business we had, LTC, [ RCT, ] Electra needs to also add on. So every time we keep on integrating businesses, we need to also to transform them into and make sure that we are using the same model. So it's a constant work. But for sure, the AI will help us to accelerate and make sure that all the countries are really up to speed in terms of model.

And maybe to give some additional color on it, you have to think that SHIFT is not a one-shot action because as we have explained in some previous calls, SHIFT is a kind of modernization of financial element, industrial element, commercial element, which means that according to the years, this element can change. Imagine that you make an investment in one factory, it will change the industrial parameters. You are launching new product. It will change your range of performance in your portfolio.

So that's the importance of what Julien mentioned. The SHIFT AI will allow us to be much more dynamic each time all these parameters, and I can tell you, it's quite a lot of parameters that we put in the modernization are moving in order to be sure that the setup that we have from industrial, commercial and financial perspective is always the best-in-class for each unit. So it's more a kind now of continuous improvement that we are doing, thanks to the SHIFT to AI.

And just to confirm that 1/3 that is kind of still need to be lifted would include the recent deals that would be in that bucket, LTC and RTC?

We'll get more deals, more M&As that we will keep on increasing up to us to quickly integrate and use the model. So then at a certain point of time, we will have less and less business that needs to be going through this model of SHIFT.

Perfect. And the second one is just on the margins in transmission. Can you comment a little bit on the legacy projects? How much is really left there? I would have thought because offshore wind projects are done and they would be there. Now we're getting to orders -- to execute on orders that were signed maybe in years post the inflation kind of era that should have, let's say, better pricing in them. So is it still a meaningful part of 2026? And should we assume 2027 is completely kind of clean in terms of those legacy orders?

Yes. I think here, there is no change. We said it in previous communication. We said that '26 will be the last year with the legacy project and that you will have a kind of increase in '27 significant to reach the high 10 percentage of EBITDA. So we are exactly in this progression, '23, '24, '25, '26 linear, if I can say this, and then a jump, if I can say this, in '27, '28 to reach the high [ 10 ] that we have shared with you previously. So we are on track with the approach. And you can say in a simple way, no more normal legacy at the end of '26.

And so just a small one on just on Charleston and what is happening in the U.S. I mean you show in the slide on the overall market that there are opportunities in the U.S. They're relatively small versus other markets. But can you highlight a little bit what is behind that? Is it something else than kind of subsea offshore wind? And is still the plan to use Charleston mostly for European project? And how do you feel about the factory load there kind of short term and medium term?

So Charleston is a loaded plant. And as you know, we have been agile to reallocate European project to this plant as soon as the Trump administration has modified basically the project that we plan to initially produce for the U.S. market. So today, the plant is loaded, and they will remain loaded because we have a backlog for that.

At the same time, what is interesting to see is the quality of the market in the U.S. is also changing in high voltage. And I will mostly talk about land high voltage. So we are today investigating capability also take some benefit of shifting some of the load to the land high voltage. So we're currently investigating these opportunities. You know that this is -- will be relatively easy to do for us because initially, this plant of Charleston used to be a plant for land high voltage. And then some years after, we transformed it into submarine. So we will put in competition both submarine project on our land for the U.S., and we'll see which basically fits better, both the profitability and the capability to do. So we will investigate most of this opportunity.

I have one question on copper prices. Since the last CMD, we have seen big increase in copper prices. I mean, in November 2024, we were at $9,500 per tonne. And now we are at $13,000 and potentially, it could move higher by the time we get there in 2028. So the question I had was that when it comes to impact of copper price movements, especially when they are going up, can you help us understand impact on EBITDA, working capital? Would there be something positive given you are vertically integrated into rod? So would higher copper prices would be positive for EBITDA that you will generate in that processing or it has a neutral impact? So basically, the question is that how should we think about copper price impact on your EBITDA going forward?

Yes. It's an important question. So -- and you're right, we -- the prices are continuing to go up. The good thing is it's fully passed through for us. So every time we lock into a deal with the customer, we basically pass through the price variations to our customers. So no direct impact on EBITDA, and there's no lag. So clearly, we're very well protected, and it's a clear point of attention for us in all of our contracts for a long time now.

So -- and then on the cash side, we're working in terms of -- obviously, it has an impact on just the value of the same amount of stock that you have to process. But the cycle time is such that it's temporary, and we also get more payables and -- sorry, payables inventory and the receivables. So all of that works kind of in sync, and we're pretty much okay from a cash standpoint as well. And we're working through the different aspects in terms of credit lines with our customers and so on.

So in total, it's very neutral for us. And because we're vertically integrated,and the comfort it gives us in terms of access to mines, access to the rods themselves as well as the recycling capabilities that we're developing, we think that over time, as prices continue to go up, this will become an increasingly differentiating factor versus the rest in terms of our ability to secure copper sourcing and making sure that we're able to fulfill our customer needs in terms of cables and wires.

I think this is a very important element. So the increase of copper put some scarcity and some difficulty of sourcing from -- in the market. Our customers know that we are strategically covered with our industrial different breakdown that we have in -- we got worldwide. And therefore, it's a way for us to benefit from gain of share of wallet because they know that in a tension moment with Nexans, they will secure their supply. So that's, let's say, indirect element, which is positive from the copper increasing.

And we -- just to illustrate, of course, it was an exceptional period. But during the COVID period in many countries, we have been the last company to operate, thanks to this verticalization because this variation give us access to the full supply chain, control of the supply chain. And as I said, in many countries, we are the last company to operate and then at that time, indeed having a significant number of market share. So this [ variation ] is key.

So basically, we can say that there is no financial upside from vertical integration through copper processing in times when copper prices are going up?

I would say there's no additional upside short term because that's been the case historically. We control our costs probably better. We control our supply better. So that existed before and price is not a direct impact. Longer term, as scarcity increases, this will be a differentiator because we'll be able to secure activity business markets, customers in a more secure way than the competition.

And again, I want to add, there is some positive of being vertically integrated. Once again, security of supply, we gain market share. We gain volume, we gain contract because we secure. Second, that we are also investing into low carbon copper into [indiscernible] in France. That gives us capability to innovate to provide something which is a technical product that our peers are not able to do. And we are able to price it, we're able to get a premium out of it. So it has a benefit in our strategy to be vertically integrated. And it's coming from innovations. It's coming to secure supply, and we are able to monetize it.

The next question comes from Scott Humphreys from Berenberg.

Just a quick follow-up on M&A, if I may. So you've reaffirmed your 2028 adjusted EBITDA target, and you've said that M&A is obviously going to be an important part of getting there. We're now in 2026, and you've acknowledged the time that it takes to transform some of the larger acquisitions like LTC. How are you thinking about the balance between hitting that EBITDA number by 2028 through these acquisitions and hitting the return on capital employed target in that year? Would you be willing to let that ROCE maybe shift out into the future if you're -- which may be a result of making some of these acquisitions in the higher margin, higher multiple spaces?

Thanks for the question, Scott. Clearly, for us, what's important is to find the right targets that strategically drive us to the next level. The -- we're committed to the EBITDA target and the ROCE target, and we'll find the best way to balance these financial objectives in the context of making the right strategic acquisitions to position the company for the medium and long term. And the speed at which we can integrate and drive the acquired businesses to Nexans' levels also varies on their size, their geography.

So there's many, many factors to take into account. EBITDA is kind of the primary objective that we put in terms of guidance, but we are not losing sight on ROCE as well and the use of our capital. We've delivered so far, and we're going to try to continue to deliver on ROCE as well.

If I can add one, I mean, typically, the acquisition we did in December on Electra in Canada is a very high level of margin. So we will have immediate and direct positive impact in our profitability. And when we're targeting also some M&As in the grid segment, I mean, grid, we know the need for capacity, and we know that we can immediately use this capacity to some segments, some verticals using our technology, low carbon recycled aluminum and to transform that into value creation. So M&As, even though we are in 2026, we believe that we have the right time to transform into value creation to hit our number by '28.

The next question comes from Eric Lemarie from CIC CIB.

You mentioned land high voltage opportunity in the U.S., and you mentioned this framework agreement with Enedis in France as well. So my question is, should we expect any framework agreement with RTE in France in the high-voltage business?

We have -- you have 2 topics for RTE. Today, the way this customer is acting on the market, we have indeed a long frame agreement, which is currently ongoing, and it's ongoing, if I remember well, for the next 2 or 3 years. And after you have indeed the subsea part -- so what they have done last year and Nexans won a significant part of it, they did a frame agreement with several offshore wind farm in this frame agreement. So that's the first one.

And indeed, with the recent approval of the PPE 3. I think it was last Thursday day officially, they are now ready to engage the next RFQ. And apparently, I will say they will go in the same direction with, again, a frame agreement on the subsea part with, again, different offshore wind farm within the same RFQ, including land high voltage. Land is always on a specific area. So okay.

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

Well, so thank you all for your questions and for quality of discussion today. So I'm glad that we had this opportunity to walk you through our business and share our conviction about the strength of our positioning in electrification, now that we are a pure player electrification. As you have seen today, our strategy is clear, the structural driver of business continue to strengthen and our execution remains disciplined. So this gives us confidence in our ability to deliver on the group financial trajectory in the years ahead of us until 2028. Thank you again for your time and continued interest, and I look forward to speaking with you again when we report our first quarter results of 2026. Thank you all.

Welcome to the 2025 full year results. [Operator Instructions]

Now I will hand the conference over to the speakers, Julien Hueber, CEO; and Vincent Piquet, CFO. Please go ahead.

Thank you. So good morning, everyone, and thank you for joining us today for Nexans' Full Year 2025 Results Call. This is Julien speaking. So let's start, as usual, in Slide 2, a short disclaimer noting that this presentation contains forward-looking statements subject to the usual risks and uncertainties.

Moving to Slide 3. So before diving into the presentation, I would like to officially welcome and introduce Vincent Piquet, who, as you know, recently joined Nexans, our CFO. Nexans (sic) [ Vincent ] brings a wealth of experience from the automotive and industrial sectors and was previously CFO of Ampere at Renault Group. So I am very pleased and we are all very pleased to have him on board. He's fully already engaged with the teams and deeply involved in the preparation of its results and our outlook. You will, of course, have a chance to hear from him in a moment.

So before we move into the results, just a brief technical clarification. So in compliance with IFRS 5, the Industry & Solutions businesses are now classified as discontinued operation in the 2025 consolidated financial statements. This is reflected both in 2025 and in the comparative 2024 figures.

Let me now walk you through the key highlights of our 2025 performance. Let's move to the results slides. Yes. So 2025 was a pivotal year for Nexans marked with an excellent financial performance. We have reached a major step in our portfolio rotation, fully refocusing the group on electrification, and we delivered a strong set of results across all key metrics. The group standard sales, if I start by this, reached EUR 6.1 billion with an organic growth of plus 8.3% year-on-year, well above our midterm guidelines and demonstrating strong momentum across all our electrification businesses.

The adjusted EBITDA amounted to EUR 728 million, representing an adjusted EBITDA margin of 11.9% of standard sales. Excluding other activities, which mainly consist of metallurgy, our electrification organic growth and EBITDA margin were even stronger with 11.6% organic growth and a 13.3% adjusted EBITDA margin. The cash generation was also very solid in 2025 with a cash conversion ratio of 47%, underlying the quality of earnings and strong cash discipline across the board. From a capital efficiency standpoint, ROCE reached 21.3%, confirming value creation power of our business model.

And finally, we ended the year with a sound balance sheet with a leverage ratio of 0.36x. Vincent will come back on that later on. And at the same time, we continue our M&A activities with 2 major acquisitions, the one in Canada, Electro Cables, that we concluded in December last year and the one in Spain, that we also -- RCT, that we also concluded in June midyear 2025.

Moving to Page 7. So this slide illustrates the consistency of Nexans' performance over time. The adjusted EBITDA has increased steadily, reaching EUR 728 million in '25, with a margin of 11%, as I just explained, compared to 10.3% in 2024. This result illustrates the group's strategic focus on operational excellence, selectivity and value growth driver.

The free cash flow reached EUR 344 million, with a cash conversion ratio of 47%, up significantly compared to previous years and higher compared to our midterm guidelines. A strong performance that illustrates the cash generative nature of Nexans' business model as well as the strong cash discipline across all business units and the working capital favorable evolution.

The ROCE also continued to improve, reaching 21.3% in 2025, compared to an 18% in '24 and reflecting disciplined capital allocation and a strong operational execution. In a consistent manner over the years, Nexans' transformation is delivering sustainable growth, improving profitability and strong cash generation year after year.

Now moving to Page 8. So as a reminder, during our Capital Market Day in November 2024, we clearly stated our ambitions to become a global electrification pure player, fully focused on our 3 core businesses: Transmission, Grid and Connect. In '25, this year, marked the final step of our portfolio rotation. And as announced, we have entered into exclusive negotiation for the disposal of the last part of non-electrification, which is Autoelectric, our automotive wire harnesses activity. This transaction is expected to close midyear 2026. With this transaction, Nexans complete its strategic refocus and now is fully dedicated to electrification with a simpler, more focused and more resilient business profile.

Moving to Page 9. So alongside with the divestment we just explained and you've seen in 2025, we continue to pursue targeted acquisition to strengthen our electrification footprint. In 2025, we completed 2 acquisitions, representing around EUR 260 million of cumulative full year sales. The first acquisition, Electro Cables in Canada, reinforced our positioning in low-voltage cable and high added solution. It brings attractive growth, a robust profitability profile and supported by a strong industrial footprint in Canada. This acquisition fits very well with our Connect strategy and offer clear opportunities to deploy our operational discipline.

The second acquisition, RCT in Spain in Saragossa area, strengthens our expertise in flexible fire safety solutions, especially in data center and critical buildings, 2 fast-growing and high value-added segments that we are targeting. The newly industrial capacity that was announced at the time of the acquisition is now up and running and delivering profitable growth. And we are very proud and satisfied with the new team that have effectively put in place this new machine and capacity increase.

What is critical in both cases, is not only the asset acquired, but how value is created after closing. In line with our approach, synergies are being deployed through the rollout of our proprietary SHIFT program, ensuring smooth integration, execution discipline and value creation. Taken together, this acquisition illustrates how Nexans used M&A to reinforce its electrification pure player positioning, expand selectivity in key geographies and replicate its value creation model in a disciplined and repeatable way.

Now moving to Slide 10 regarding the sustainability. So let me focus on sustainability, which is fully embedded in Nexans' operating model and group strategy. In 2025, and especially on our decarbonization trajectory, Nexans pursued the same trend and exceeded its midterm target for Scope 1 and 2 with minus 49% of CO2 emissions, mainly driven by energy efficiency solutions implemented on site and significant level of renewable energy usage.

In the meantime, the current performance on Scope 3 was reached following low carbon product innovations and circular material integration for our initiative like CableLoop that was launched in France and Spain with our platinum customers, enable us to reach 880 tonnes of cable collection during the year. We will explain in the deep dive session how we will expand these solutions.

Through these initiatives, combined with the metallurgy project in Lens that will be commissioned in 2027 or another example on the partnership with RTE, the French TSO, where we have launched the first European closed-loop recycling system for aluminum, we are not only reducing our environmental footprint, but we are also reinforcing supply security and reinforcing a structural competitive advantage on the energy sector.

Let's move to Slide 12 and go now deeper in the business overview regarding the year 2025 performance. So first, let me first focus on the fourth quarter, which was particularly strong. In Q4 2025, the group delivered an organic growth of 11.8% or even 18% excluding other activities, reflecting an exceptional high level of activity, notably in Transmission and in Power Connect. This Q4 performance was well above our normalized run rate, supported by a combination of strong demand, high project execution intensity and a favorable phasing effect. Of course, we anticipate a normalization of the first quarter 2026, reflecting a more balanced phasing of projects.

Beyond Q4 dynamics, the strong finish of the year further supports the structural improvement of profitability with the group adjusted EBITDA margin reaching 11.9% and 13.3% excluding other activities, which was mostly driven by Power Transmission and Power Grid and supported by our selective approach on quality of execution.

Overall, 2025 clearly demonstrates Nexans' ability to translate long-term electrification trends into profitable growth.

Now let's now move business by business, and I will start by Power Transmission, which delivered an exceptional level of organic growth in 2025. Indeed, organic growth reached plus 29.8%, so almost 30% for the full year, accelerating at the 40% rate in the fourth quarter of 2025, reflecting a very high level of activity and a strong execution. Bear in mind that the last 2 years, we have registered an unusual high level of organic growth, thanks to capacity increase, and we should go now back to a normalized level in 2026.

The standard sales of Transmission amounted to EUR 1.6 billion compared to EUR 1.2 billion in 2024. The adjusted EBITDA reached EUR 203 million, EUR 203 million with an adjusted EBITDA margin of 12.3%, up from 11% compared to the year before. This margin improvement was mainly driven by quality execution on projects and increased efficiency following the full year operations at the expanded plant in Halden in Norway. Finally, the adjusted backlog stood at EUR 7.7 billion at year-end and including EUR 1.2 billion of the GSI project still in phase of rescheduling with our customers. This adjusted backlog provides us a good visibility until 2028.

Now moving to the Power Grid part. Our Grid business delivered a growth of 5.5% in 2025, in line with our midterm guidelines and confirming a favorable momentum. In the fourth quarter, organic growth was plus 3.5%, reflecting seasonal softness, particularly in winter sensitive activities and project phasing. Standard sales amounted to EUR 1.3 billion compared to the EUR 1.2 billion in 2024. The adjusted EBITDA increased to EUR 217 million, which is up by 19% year-on-year with an adjusted EBITDA margin of plus -- sorry, of an EBITDA margin of 16.4%, which is an improvement of 226 bps points.

This strong performance reflects our focus on operational excellence with the continued strength of our accessories activities, increased selectivity in high demand environment as well as some one-off effect linked to some European renewable projects that we had in the last part of the year -- this strong performance reflects our focus on operational excellence, the continued strength of our accessories activity and increased selectivity in a high-demand inventory as well as some one-off effect linked to some European. Importantly, the business benefits with strong visibility supported by multiple long-term frame agreement wins with recent contracts such as Enedis, providing increased visibility going forward. And if you remember, we have communicated the wins in the contract of Enedis for coming 7 years.

Now let's move to Slide 15. Finally, the Power Connect business, which grew organically by 3.6% year-on-year in line with our midterm guidelines. In the fourth quarter, organic growth accelerated by a plus 10.9% driven by delivery of large infrastructure and data center-related projects. Standard sales reached EUR 2.3 billion, which compared to EUR 2 billion in 2024. The adjusted EBITDA amounted to EUR 289 million compared to EUR 271 million in '24, and it stood at 12.3% compared to 13.1% last year.

Margin performance reflects strong profitability in advanced offer on platinum customers, while the more conventional part of the business remained under pressure, particularly in Asia Pacific and in Oceania. Finally, the integration of La Triveneta Cavi in Italy and the rollout of the SHIFT program continue as planned, with a strong focus on operational and industrial excellence. Again, let me remind you that Power Connect is a contrasted segment where we have some very strong performer, both in top line and margin, and our objective is to make all business units catch up with the best-in-class.

We will now move to the key financials, and Vincent, welcome on board, and over to you now for the financial part.

Thank you, Julien, and good morning, everyone. Before going into the details, let me take just a brief moment to say that I'm honored to be here today. I want to thank Julien and the Board for their trust. I've now been working closely with the teams for a few weeks, and I'm very excited about the fundamentals of the business and the road ahead.

With that, let's start with the 2025 revenue bridge. As you can see, group standard sales increased by 10.1% year-on-year, reaching nearly EUR 6.1 billion. Growth was primarily organic with a strong 8.3% increase, reflecting a solid underlying momentum across the group. Scope effects contributed a further 5.1%, illustrating the growing contribution from our recent acquisitions over the year, mainly RCT and LTC full year contribution. These positive drivers were partly offset by an unfavorable foreign exchange impact of 3.3%, mainly related to the Turkish lira and the Canadian dollar.

On the profitability side, adjusted EBITDA increased by 27.3% year-on-year, reaching EUR 728 million in 2025, with the margin improving from 10.3% to 11.9% of standard sales. This evolution reflects the contribution of our electrification businesses supported by growth and margin improvement. First, Transmission delivered both growth and higher profitability, making it a strong contributor to the group's EBITDA improvement last year. Grid also recorded a positive year with strong improvement in profitability year-on-year.

And in Connect, performance was more contrasted across regions and business units as described by Julien. Asia Pacific and the Nordics were slower, and the process of improving LTC's performance is ongoing, and we also have the impact of the full year versus a few months in 2024. That said, we are confident in our ability to bring LTC up to Nexans' standards. Overall, within Connect, our structural drivers performed well, while we remain focused on enhancing the profitability of the rest of the portfolio. The Connect segment includes EUR 26 million of scope effect in the full year of LTC and only 7 months -- sorry, the full year of LTC versus only 7 months in 2024 and RCT with a 7-month contribution.

In other activities, the variance is mostly driven by negative one-offs recorded in 2024. As expected, metallurgy was impacted by the U.S. tariffs effect in H2 after a strong H1 and accounts for a negative EUR 6 million of impact on a full year basis.

Overall, this bridge illustrates strong operational leverage in 2025 with EBITDA growth clearly outpacing sales growth and translating into a meaningful margin expansion.

Moving on to net income. As we've just seen, the starting point of the net income progression in 2025 is a very strong increase in adjusted EBITDA from EUR 571 million in 2024 to EUR 728 million in 2025, an increase of 27.3%, well above the 10.1% of growth of our top line and demonstrating our strong operational leverage. This EBITDA progression is also the main driver of the increase in net income from continuing operations, which reached EUR 219 million, up 31.1% compared to last year.

Beyond EBITDA, a few additional elements are worth highlighting. First, financial expenses decreased significantly, mainly linked to hedging effects, in particular, the evolution of the forward spread on the Norwegian kroner. At the same time, depreciation and amortization increased to EUR 253 million in 2025 compared to EUR 175 million in 2024, mainly reflecting investments in our Norway transmission plant in Halden.

Net income from discontinued operations increased to EUR 138 million, reflecting gains on disposals linked to AmerCable and Lynxeo as well as the operations -- operating performance of Industry & Solutions, partially offset by an impairment on Autoelectric as we moved it to discontinued operations. Overall, group net income reached EUR 358 million in 2025, up 26.6% year-on-year, illustrating the strong earnings conversion of the group's operational performance.

Moving now to cash flow and net debt. 2025 was another year of solid free cash flow generation, which reached EUR 344 million compared to a restated amount of EUR 177 million in 2024, translating into a 47% cash conversion rate above our midterm guidelines. This level reflects, first, the strong performance of adjusted EBITDA, but also a strict cash discipline as shown by our working capital evolution and also helped by above-average down payments in Power Transmission.

CapEx amounted to EUR 383 million, mainly driven by Power Transmission as we continue to execute on the capacity expansions decided in prior years in both Norway and Charleroi in Belgium. Dividend and others includes the cash impact of our employee share buyback program on top of the dividend payment. And the M&A column mainly reflects the contribution from the closed acquisitions of Electro Cables and RCT. It does not include the impact of Autoelectric as the closing of this transaction is expected mid-2026.

Change in discontinued activities relates to the divestments of Lynxeo and AmerCable as well as the reclassification of our automotive activity under discontinued operations in compliance with IFRS 5 standards. As a result of these transactions, combined with strong cash generation, net debt decreased significantly from EUR 681 million at the end of 2024 to EUR 266 million at the end of 2025. As you can see, overall, the company is in great financial shape.

Let me now spend a moment on our financial structure. At the end of 2025, Nexans benefits from a very solid liquidity position. We have significant cash on hand, complemented by committed and largely undrawn credit facilities. This gives the group ample headroom to operate comfortably. Our debt structure is well diversified and fully fixed rate, which protects us from interest rate volatility and provides good visibility on financing costs. And importantly, we have no material debt maturity before 2027.

From a leverage perspective, Nexans remains very conservatively positioned with a low financial leverage ratio of 0.36x. This strength is also reflected in our credit profile with an S&P BB+ rating with stable outlook. It confirms that the group has the financial firepower to pursue targeted M&A, growth CapEx and continue to deliver shareholder returns.

In fact, shareholder return is a core component of our value creation model. Over the past 3 years, Nexans has delivered a total shareholder return of 59% and 215% over the past 6 years. This performance reflects the consistency of our execution over time. As shown here, the dividend per share has increased steadily over the past years, reaching a proposed EUR 2.9 per share for 2025, an increase of 11.5% compared to 2024 and another historical record.

This dividend growth is anchored in the group's improved profitability, strong cash generation and disciplined capital allocation. Our approach remains very clear. We aim to reward shareholders while preserving flexibility to invest in our growth and maintain a sound balance sheet.

Looking ahead, this discipline remains a key area of focus. Our dividend policy is fully aligned with our financial trajectory with a target payout ratio of at least 30% by 2028, while remaining consistent with our leverage and investment priorities.

And with that, I now hand over back to Julien.

Thank you, Vincent. So let me now turn to outlook for 2026. So we expect the -- for 2026, the adjusted EBITDA for the full year to be between EUR 730 million to EUR 810 million and for our free cash flow to range between EUR 210 million and EUR 310 million. We expect the first half of 2026 to be softer than the second half, mainly due to project phasing across different segments. This guidance excludes the contribution of a non-complete acquisition and does not assume the execution of a GSI project in 2026.

Overall and in conclusion, I think that you can see that from the combination of our '26 guidance and the dynamic nature of divisional overview that we are excited for the future. We have successfully transformed into a high-return business with a robust balance sheet focused on electrification as a global pure player. Nexans will continue to operate with a disciplined financial framework for the benefit of its shareholders, employees and the broader economy.

So before moving to the Q&A, I would like also to remind you that we will host our business deep dive sessions today shortly after this session at 10:30 Paris time. We will go deeper into our value creation model, market and strategic priorities. We will provide you an additional insight into how we are executing on roadmap.

So with that, thank you all for your attention. And with Vincent, we'll now be happy to take your questions.

[Operator Instructions] The next question comes from Daniela Costa from Goldman Sachs.

I was hoping to ask 2 related things. But the first one, just can you clarify in the guidance on EBITDA between the bottom and the top end, you're very clear that you've taken off GSI from it. But do you have any contract mitigating the under-capacity that you would potentially have from not executing that? How much is included in the bottom end and in the top end of guidance? I'll start there, and then I'll ask the follow-up.

Daniela, thank you for your question. So clearly, yes, GSI is not included into our guidance, even though we are -- as we have communicated early January that because this project is rescheduled, that we are at the same time launching specific actions, both industrially speaking, but as well commercially in order to offset partly the GSI element. So we are actually quoting different projects on MI on a part of it. Of course, I cannot display precisely because we are still quoting and we don't know precisely when it will start, but a part of it is inside the guidance.

So just to be very clear, on the EUR 730 million at the bottom end of guidance, that includes part mitigation on things that are not yet in the backlog but in tendering?

Exactly right. We are still quoting on some MI projects on those. We have considered that some of them, we have a good chance to succeed. But the timing element is not yet clear. So we will -- we have included some of it but not fully.

And the top end of the guidance is the full compensation of GSI or not -- also not fully?

So the guidance is not only about Transmission. It's also about different elements. Typically, the restart of the European business that you know has been relatively soft in 2025. We consider some elements of the restart of the activity, specifically in H2, softer in H1, stronger in H2 for the restart of the business, and that's mostly impacting the Connect business.

Okay. Got it. And then just a follow-up also in Transmission. You mentioned that you will have, I guess, 2 other things, normalized level. Just wanted to clarify what should we interpret it as normalized? Do you think transmission business top line-wise can be up or given taking off GSI? And also, can you clarify your comment on the first half versus second half EBITDA? Do you -- how should we think about the first half margin for Transmission given that's potentially the mitigations, I would imagine if you're still tendering, fall more into the second half, what type of profitability should we think about for the -- between the 2 halves?

Okay. So overall, we foresee an improvement of our EBITDA during the year 2026 in Transmission with indeed a stronger increase in second half due to the reason we just explained about, still quoting for the MI part. That's basically why we see a softer in H1, stronger in H2. That's basically -- and maybe Vincent, I don't know if you want to add anything?

No, I agree that the timing of the quoting makes it a bit second half loaded. And beyond transmission, also the other businesses, we feel very good about Grid and Connect is, as Julien mentioned, a bit dependent on the improvements of the European market, and we're being cautious in terms of what will happen in the second half. And then finally, I'll mention in terms of explaining the range of the guidance, there's a metallurgy, which is quite impacted potentially by tariffs volatility in the U.S. And so we're trying to take that into account in the range we're proposing today.

Okay. And you can't comment on Transmission first half versus the second half of '25, for example, just to help us understand how much is underutilization in the first half could mean?

In '26, you mean? The underutilization of the MI line will be manageable in H1 as we're basically working to do some cost actions. And then in the second half, we are planning on winning a number of short orders and new orders that will fill the line.

The next question comes from Akash Gupta from JPMorgan.

I have a few as well. The first one is on your cash flow bridge. So when I look at your full year cash flow bridge, you have minus EUR 371 million for M&A and disposals. And if I compare it with H1, you had EUR 613 million in inflows from divestments. So I wanted to ask this EUR 370 million -- EUR 371 million is only what you paid for 2 deals and not the disposals? So now the disposals have accounted separately? So that's the first one to ask what that EUR 371 million in the cash flow bridge is?

You got it right. We've separated the disposals from the acquisitions, and the way you explain it is the correct way.

And then my second one is on M&A. Clearly, you have been quite vocal about your M&A ambition in the press release, but I wanted to ask what are the area of focus? Maybe you can talk about the regions and business areas. And can you also talk about the hurdle because some of the growth business could be quite expensive compared to where you trade. So do you have any hurdle rate that you would like to highlight on which acquisition you want to go ahead and which you will not?

So we will deep dive a lot on the M&A on the second part in the deep dive session just after. But basically, our strategy remains very aligned to what we said end of last year. So there is -- it's based on 3 elements. One part -- pillar of the M&A strategy is linked to midsized companies -- small to midsized company in country where we already here to create industrial synergies in some markets we are already present. Second pillar of the strategy is based on slightly bigger size of M&As in new geographies. And the third one is based on, let's say, adjacent to cable, so basically could be anything like accessories.

So that's our strategy, and we are fully in line with. This doesn't change. It's the same strategy. Having said that today, we are looking specifically some geographies like the North America, the example of Electro we did in December, is a good example. But we are looking for other type of target in North America as well as other part of the world, could be Middle East or the other parts.

And lastly, a housekeeping question. Depreciation and amortization last year was EUR 253 million, and I believe it might be including some one-off there. It was EUR 175 million in 2024. Can you tell us what shall we expect in 2026 for D&A?

Yes, it will stay in line. We're continuing to see the impact of the investment we've made in Norway, especially, and that's hitting our P&L. And from a cash standpoint, the major outlays on par -- in line roughly with what we've had in 2025, are driven by the third vessel as well as the investments in Charleroi in Belgium, the land cable plant.

So roughly EUR 250 million D&A in 2026?

Roughly.

The next question comes from Lucas Ferhani from Jefferies.

The first one will be on the free cash flow. Just can you give us an idea of what do you expect the conversion could get to? You're still investing quite a bit in '26, '27, and it's running at 30% plus at the moment. But what could you get to the EBITDA conversion of free cash flow in the next few years as the CapEx kind of comes down a little bit?

And the second question was just on the grid margin. Obviously, it's very, very strong in the second half. Can you give us an idea of maybe what's the normalized level? You do talk about some kind of pull-forward of activity or some one-off effects in there. Kind of how should we think about that margin going forward? Is 17% something you can do again in H2 next year or maybe that should normalize a bit?

So thank you, Lucas, for your question. I'll take the first one on free cash flow conversion. So free cash flow conversion in general is improving on the flow businesses, but the Transmission business, as you can see, is obviously big and lumpy, and it depends a lot on down payments. So we had a bit of a strong year in 2025. We will continue to improve progressively as we grow all of our businesses, but it's a bit dependent on the down payments we'll get from the different deals in the Transmission business. And so we're committed to our 2028 guidance on the cash conversion, and we'll continue to drive that in '26 and '27 as well.

And Julien?

Regarding your second question, yes, indeed, you have seen the jump in the margin for Grid moving 2 points up 14% to 16% EBITDA margin. We are very pleased with this business. The demand is very strong. We expect to -- let's say, at the first stage to maintain this level of margin. And it's driven by innovation, driven by accessories that is still growing and at a higher margin even.

So in order to continue to push, we need to continue to develop specific verticals. And I will explain at the deep dive just after the importance of data center, that are a big driver of margin increase for the Grid parts. But I would say, let's say, in the coming months, we should be at, let's say, similar level of margin before we acquire new capacity, and we are working on it currently in order to continue to grow and develop this business. But it's a very solid, resilient business and a big part of the result of Nexans.

The next question comes from Sean McLoughlin from HSBC.

Firstly, Vincent, taking maybe a fresh look at the margin progression in Transmission, how confident are you on the journey to high teens margins by 2027, 2028? And what in your view are the key steps to reaching that level? That's the first question.

Yes. Thank you, Sean. It's a very important question. It's something we spend a lot of time on with the team. We see significant improvement. You saw it between '24 and '25, and we're still committed to the direction we've given historically of continuous improvement. It's driven by a few things. First, much better quality of execution. We've invested a lot in the team to drive that quality of execution and not have bad surprises during the execution phase of the project. And we are seeing that investment pay off in 2025. The margin improvement is driven by this better quality of execution.

Second thing, the selectivity we've applied to the deals that we've taken into the backlog is paying off as well. We're continuing to execute on historical bad cholesterol, if I can say, deals that are hurting our profitability. The new deals we see ahead of us, the ones we're starting to execute on now, are much better in terms of margin accretion, and that gives us very much strong confidence in our ability to get to the high teens in terms of profitability for the Transmission business.

If I could touch also on Connect. You've talked about need for recovery in Europe. You've also talked down Asia Pac in Q4. Again, can you maybe just walk us through what are the main components of improvement in profitability in Connect in '26?

Connect? Then I will take this question. So Connect, indeed, you've seen a lower margin in second half. It's -- I mean, we understand very clearly, and we are working on it precisely, it's coming from a few elements. First one is indeed pressure on price in Oceania, specifically in Australia, second half of the year. That has impacted us negatively, and we are currently changing things to come back to a normalized level of profitability in this part of the world.

Second is that one of the high contributor of margin in Connect is the Nordics in the Northern Europe. I mentioned that in Q3, but it remains in Q3, the same, that the market there has been softer. So we have had less volume, not -- we didn't lose any market share. In fact, we even win market share, but the overall market has been very soft in this part of the world. And we expect to see hopefully an improvement, let's say, midyear second -- Q2 or midyear 2026.

And the third element is, you know that our strategy, what we did in the M&A, is clearly to buy, make some acquisitions at a low multiple. And therefore, the margin level of the company that we bought are lower than our average. They are not yet at the maturity in terms of innovations, technology, verticalization. And when you -- on all our job is to transform them into a much higher level of profitability.

In the case of 2025, specifically second half, we had a full year effect of LTC, which is not yet at the level we expect from them. They are working very hard. We're very satisfied what we do, but the size of this LTC business has an impact on the overall margin of Connect. Having said that, all the other -- and you know that we are clustering our businesses, different cluster, innovation drivers, profit drivers. This business, the top-end of our business, which is a large part of our Connect business, is doing very well, both in margin level, both in growth.

The next question comes from Scott Humphreys from Berenberg.

I have 2 actually. I'll ask them one at a time. The first one on the high-voltage demand through the next decade. How have recent U.K. offshore wind auction results and some stronger pledges from the North Sea companies around offshore wind influence your view of supply and demand in high voltage into the next decade? That would be the first question.

Okay. So I will start. So I guess you have seen in Hamburg a month ago, a big meeting with the politics, energy ministers from 7 countries, highlighting the need and the importance to deploy offshore wind businesses in -- from -- basically from 2030 to 2040, with an increase of capacity of offshore wind of 15 gigawatts per year for the coming 10 years. So the demand is there, and it's supported by the, let's say, different states in North of Europe.

So we see that this business will continue to grow. So 15 giga per year, it's huge, because you need to keep in mind that currently in -- we have 34 gigawatts already installed. So the ramp-up of this business will be extremely important.

Second, interconnections. Here again, there has been a very supportive, European Commission, to accelerate the interconnection links between countries, funded by the European Commissions, and they have committed if you -- I don't know if you have seen this but in December. So basically, both businesses, of our submarine, both wind offshore and interconnections are basically positive in the outlook in the next 10 years.

Great. And moving over to the metallurgy business in other activities. How is the continued rise in metal prices influence your view on kind of the pros and cons of vertical integration in bulk production? And maybe as a follow-up to that, why don't you think peers -- or why do you think peers might not be following your footsteps in this regard?

Yes. Thanks, Scott, for the question. The metallurgy business is strategic to us. We see a lot of advantages of this integration. It's security of supply, which is key. It's recyclability. We control prices much more. We have long-term agreements with mining firms that gives us a lot of stability in our supply. So we clearly think that strategically, it's really important for us to keep this metallurgy business, and we're driving it. And it's obviously quite impacted short term by the movements in the tariffs. It's adapted well. As I mentioned, after a very strong H1, it had a tough H2. But net-net, overall, it's been quite neutral. And so we're managing it strongly and investing in that business. We think it's very important for us.

The rise in the copper price is obviously having an impact. We're quite protected. It actually -- we transmit that increase in price to our customers. We're protecting ourselves and protecting the financials very strictly. And we see maybe a long-term impact in terms of copper demand and evolution. But in total, for us, in the midterm and short term, it's really, really strategic, and having that integrated business actually gives us more levers to react and to adapt to the current volatility in the price and the tariffs.

And I will add one point. If you remember that 4 years ago, Nexans has clearly mentioned that by '26, '27, there will be some kind of scarcity of copper supply. And now you start to see the impact on the basically tons of copper reaching $13,000 a ton. So we anticipate that a few years ago. That's why we have massively invested in our metallurgy and Rod Breakdown in Lens because it gives us a capability to recycle scrap of copper. This project is well ongoing. It should be in operation by 2027. And we will have access to the ability of scrap copper -- scrap cables already on site in Europe. So it will also give us an additional security of supply.

The next question comes from Chris Leonard from UBS.

Could I maybe go with 2 questions to start with? And the first is digging in again on the Connect business. And maybe it would be helpful if you could give us, as you have previously, what the divisional margin might have been for 2025, if you were to exclude LTC. I believe you commented on that in first half results. And equally, could you also help us dig into how big the Asia exposure is or Oceania, which you commented on being weak? When we're trying to judge how the margin in the second half of the year, was 11%, so the weakest since 2021. Just trying to get a read if this is an aberration in the short term.

And then the second question, actually, I'll wait for the second question.

Okay. So for sure, if you exclude the M&A on LTC -- but, yes, it is the same, by the way, because it's just taking -- we are taking over this business. If you exclude the newly acquired businesses, which are ongoing in the transformation, the average of EBITDA would be much above, and we will not see any decrease of the percentage of EBITDA. So that's why we are putting a lot of effort and focus in order to, I'd say, the transformation of this business. We have launched in Q3 and Q4 some innovations for the Italian market with a brand Klaro and so on. So we are on the way to transform the business. But clearly, it has an impact on the overall businesses.

On your second question regarding the businesses in Oceania, it's an important business for us, but it's not -- let's say, it's less than 10% of our overall activities in Connect.

And maybe I would say, Chris, also, if you take the -- a bit of a step back, we've taken the profitability of that business from mid-single-digit levels to strongly above in the double digits. And there are some ups and downs. We're integrating, as Julien mentioned, businesses that were improving as we're bringing them up to the Nexans level. So if you take a step back and look at the trend over time, clearly, it's very positive, and we know how to do this. We've done it in the past, and we'll continue to do it.

And we will present to you just to this next session, an example of Reka, which basically we acquired 2.5 years ago, which is very -- exactly at the level we expect, above the average of Nexans in terms of profitability.

That's helpful. And the second question, Julien, is maybe related as well. But just looking at the 2028 EBITDA guidance range, that's remained unchanged. And I know that you guys are focusing industrially here and maybe there could be some further synergies that come through. And I just wonder, on your look at the portfolio, if there's been any view as to where you think the possibilities are on the industrial angle for you guys looking into 2028? And then as a follow-up, could you also comment as to how much of the GSI contract is currently factored into that 2028 EBITDA guidance for the group?

Okay. So yes, you are a little bit on the industrial part. Already at the second session that I will describe just after. But basically, you're right. It's important for us. Our DNA, we are industrial people. Our DNA is industries. We will -- and we have launched already several actions on the industrial excellence and the operational excellence that will provide us some competitiveness in order to help our business to grow and to continue to grow our EBITDA margin. And that's -- Connect is clearly one element in this.

Regarding the guidance for 2028, indeed, we maintain the same guidance of EBITDA, no change in this. We are clear that we will achieve these targets. We have in this guidance 2028, some utilization of the MI line, of course. So either it will be GSI if this project resume and we have good hope that it will come back or we will use unless other ongoing large projects to come in MI, as I think we have explained also recently, that could also replace. But we have the possibility to do either GSI or another one, but it's included in our numbers for 2028.

And just to clarify on that in terms of other projects you're looking at, should we view this as a sort of previously discussed plan B for GSI? Or should we view this more as like sort of the Malta-Sicily contract that you signed last year as a small extension and a book to ship within a year or within 12 months? How should we kind of look at these projects you're looking to sign currently for the Transmission business?

So regarding MI specifically, it's nothing to do on the plan B, is in all, let's say, deepwater project requires MI technology. There are some project queuing today that we will be able to quote. Now that we have announced, and this is why basically I have taken a decision to make this communication early January, was to officialize the fact that we have an MI line available, and that triggered some opportunity and discussion with some customers that know that we have now this line available for some time. And therefore, we are now discussing with them to basically quote and win this project of MI. So MI will be loaded by 2028. I don't see any problem on that.

The next question comes from Nabil Najeeb from Deutsche Bank.

Just staying with GSI for a little bit. First off, and sorry if I didn't catch this, but what is the current status of GSI exactly? Is the rescheduling now done? And if so, what's the ultimate time line that you have settled on? And is the cable that has already been manufactured going to be stored until the customer then decides to restart work? And is there any compensation that Nexans gets for the idle capacity in such cases?

Okay. So the situation -- again GSI is the same as what we have communicated early January, meaning that there's a rescheduling ongoing with customers. So we have some very close discussion with customers about a different date to restart the project. So this is what we call rescheduling. So there's not a date specific because there are things ongoing. And I'm sure you understand this discussion are more at a political level that I will not describe.

What is for sure is that all the cable that we have produced on store today belongs to the customers. So Nexans has no financial impact on this matter. So today, we are talking with customers, [ the site meeting ]. So this is basically it. But there's been no specific news since the communication we did early January.

Yes. Just to be -- all the cable produced has been paid for. So financially, we're completely covered. It's being stored. The customer is obviously working through its own processes and decisions, and we're working with them and to see when it can be installed. But financially for us, it's fully neutral now.

Got it. And my second question is on the mitigation measures. I wonder if you could give us a bit more color on the various mitigation measures that you're considering? Specifically, which, if any, projects are you hoping to bring forward from the backlog? And I realize you have started some discussions on new projects, but are there any specific new projects that you are looking to win? And finally, how would the margin profiles for repair work differ from those 4 large interconnected projects?

So I would say the mitigation measure, they have 3 type of categories. The first one are purely industrial. So we are relocating the workforce. We are reducing some expenses. We are doing what needs to be done in the plant when you have a line which is basically not running. So that's done. That's ongoing and we are -- the reactivity of our teams in Norway has been at a great level.

Second is that we have already win some small orders for repairs because the line is available. It's an important business of doing the repair. And what matters when you do repair is the speed. So you need first to have a cable available to do reparation as well as the vessel available. So we are setting in place an organization to be able to both produce, and we are producing some cable for repairs with our customers, basically, they own the cable. So this is ongoing. And we are, let's say, setting an organization in order to be extremely reactive in case a cut of cable appears under the sea.

And third is the commercial activities. So we are -- I'm not going to give you a name of a project because I guess some of my competitors could hear what I'm saying. But indeed, we are currently quoting for some projects on MI, and we expect to have some answers during ahead of Q2 or during Q2 in order to see and hopefully win some of these projects.

Understood. If I could squeeze in a short one. Just on the MI workshop that you have in Futtsu in Japan, what's the plan for that?

We have communicated, if you remember, I think it was September, October, the fact that we have basically sold this workshop to a company. We can use it, but it does not cost anything. So when it's idle, when the loads are not -- when the machines are not loaded, it doesn't cost anything to us. It's -- we sold the land, the building on the machine, but we are -- it's available to us as soon as we have some load to do. So no cost for us in Futtsu.

The next question comes from Eric Lemarie from CIC CIB.

I've got 2 small questions. Precision first, you mentioned -- when you talk about backlog, you mentioned an adjusted backlog in your press release. And I was wondering what kind of adjustment are you talking about here? And when I look to the backlog, should I consider that the projects within the backlog are 100% secured? Is there anything specific to know here?

And the second question about the project you mentioned, you mentioned you are quoting on some new projects to mitigate GSI. Are you talking about similar -- are you talking about wind offshore or interconnection project or similar project in terms of profitability or the larger project you are currently quoting? Just to have an idea of the profitability difference between this potential new project and GSI profitability?

Thank you, Eric. I'll take the first one. So the adjusted backlog is basically due to the nature of the type of contracts we enter into the Transmission business. Everything that's in the backlog is executable. So it will convert into cash. That's why we put it into the backlog. But the time line and the exact call-offs by the customers in terms of when it happens have different levels of certainty. And so there are things that are extremely firm and certain. There are things where the time line can move a bit more, which is why we use this notion of adjusted backlog.

But overall, what we report as adjusted backlog is, unless there's a major cancellation and change in contract, obviously, but it's convertible into cash in the future to drive our cash and profitability.

And by the way, it's the same definition of the backlog like we always did, so there will be no change on that.

I will take the second question regarding the, let's say, other MI projects. So to answer your question, it is interconnection type of projects. So specific to MI technology, so meaning deepwater type of projects. And in terms of profit, of course, we are quoting, so difficult for me to tell you a number, but we are in the similar type of profitability as GSI, yes, same technology, same type of margin.

Very clear. And regarding the backlog, how much is -- could be considered as extremely firm project within the backlog?

We don't really communicate on that. We just communicate on adjusted backlog.

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 for the discussion we had together. So we now look forward to continue this conversation with you in just a few minutes during our business deep dive, where together with Vincent Piquet and Vincent Dessale, we will go deeper into our value creation model, our markets and how we are intensifying execution across the group.

Thank you again, and hope to see you very shortly.

Thank you.

Good morning, and welcome to Nexans' 9 Months 2025 Financial Information Conference Call. My name is Laura, and I will be your coordinator on today's event. [Operator Instructions]

And now I'd like to hand the call over to Mr. Julien Hueber, Nexans' CEO. Please go ahead, sir.

So good morning, everyone, and thank you for joining us today on the Nexans conference call. It's a special moment for me to be speaking with you for the first time as the CEO of Nexans. With me today, I have [ Christine Preolevi ], our Interim CFO; and Audrey Bourgeois, our VP, Investor Relations.

I would like to begin by thanking the Board of Directors for their confidence. It's an honor to take this role and to lead a strong, high-performing company with a clear vision for the future. I also want to express my appreciation to Christopher Guerin for his leadership and the remarkable transformation he has led, a transformation I was proud to help drive as part of the Executive Committee. Chris leaves behind a strong company built on solid foundation that we will keep strengthening.

I spent more than 2 decades at Nexans always close to operations and transformation. From my early years in manufacturing to leading our activities in China, South Korea or globally for the Industry & Solutions project, I've seen how performance is built on operational excellence, flawless execution and a deep understanding of our customers.

As a member of the Executive Committee since 2018, I helped shape the group strategy on the capital markets road map. Leading our EUR 2.6 billion of PWR-Grid and Connect in Europe business reinforce my conviction that agility, execution and industrial excellence are the levers that will be key to Nexans's next chapter. Our strategy remains unchanged, and the megatrends behind it never been so strong. Electrification is accelerating and the need for secure, modern infrastructure keeps growing. These dynamics reinforce Nexans' positioning and long-term strategy.

As a new CEO, I want to be very clear, we will continue to execute the road map presented at the last Capital Market Day, and we confirm our 2025 guidance and 2028 objective as well. The direction is right and the foundation are solid and all megatrends are continuing. The environment, however, has grown more complex since our last Capital Market Day, from geopolitics, supply chains disruption or shifting policy environment around energy and renewable. This makes one thing clear. It is the right time to make Nexans even stronger, stronger in execution, stronger in competitiveness and stronger in agility.

I will continue to fuel our model of value creation that delivers results, combining our SHIFT program, complexity reduction, innovation deployment and vertical development. But building on that, I will also move forward and I will emphasize even more on the further complexity reduction of the organization, efficiency optimization of our industrial operations, both in terms of productivity and cost competitiveness, further mutualization of our industrial footprint and of course, keeping absolute discipline on cost and cash. All these priorities will further enhance the resilience of Nexans model.

Our ambition is clear, to consolidate Nexans' competitiveness while amplifying selective profitable growth in Electrification, powered by digital acceleration and the smart use of new technologies and artificial intelligence. Nexans is entering this new phase from a position of real strength. We have a clear road map, robust financial foundations and teams that are talented, dedicated and united and proud of what we do. Together, we will deliver with strong discipline and focus, the long-term value creation for all our stakeholders.

So after this introduction, let me now turn to the group's performance in Q3 on the first 9 months of 2025 on Page 4. In the third quarter, the group delivered a plus 7.7% organic growth, including a strong 12.6% in Electrification. Over the first 9 months of 2025, the group standard sales reached EUR 5.3 billion, representing a plus 5.8% organic growth compared to last year. Over the same period, Electrification, which remains the core of Nexans growth, recorded a plus 9.4% organic growth, confirming our disciplined execution across our 3 segments, which are Transmission, Grid and Connect.

Our Transmission adjusted backlog reached EUR 7.9 billion at the end of September, providing for Nexans a strong visibility for the coming years. And no later than today, I am pleased to announce the acquisition of Electro Cables in Canada that will be reinforcing Nexans' position in PWR-Connect in a highly dynamic market and with approximately EUR 125 million current sales on a yearly basis. And I will come back on that on the next slide. In short, the first 9 months confirm the solid and disciplined growth of our Electrification businesses. This performance reflects our sharp focus on high added value solution and our selective approach to capture the strong underlying trends in Electrification.

So before we move to our segment in details, I wanted to highlight something that is important to me. So I will move to Slide 5. Our Innovation Summit in Toronto that took place 2 weeks ago was a great platform for exchange with our platinum customers, our technology experts and our partners. Nexans becoming a pure player of Electrification. So I believe that our role is to bring together the key stakeholders of the electrification ecosystem to imagine and to build collectively the next level of electrification that is critical to our societies from powering homes and hospitals to supporting education and many other essential services. The choice of holding this event in Canada reflects our strong interest in North America. Canada is a powerful growth platform for Nexans, both for the Grid and the robustness of this construction industry in our Connect segment.

So talking about Canada, I will now move to Page 6, where I will present the acquisition of Electro Cables that was signed today, this morning, in fact. Electro Cables is a Canadian player in low-voltage cable system, delivering a high performance and service-focused solution. This company represents a strong strategic complement to Nexans Canadian portfolio, offering an attractive growth perspective and a robust profitability profile. This acquisition also allows Nexans to further strengthen and complement its portfolio in Canada, enhancing its position in a very dynamic market while optimizing local supply chain efficiency. It also paves the way for valuable synergies driven by Nexans' expanded local presence and the rollout of its proven proprietary SHIFT program while enhancing innovation. This acquisition will be fully financed in cash, leveraging Nexans' strong balance sheet and is expected to be EPS accretive from day 1 and from year 1.

Now moving to Page 7. Let me now comment the overall group performance over the first 9 months of 2025. Standard sales reached EUR 5.3 billion, representing a plus 5.8% of organic growth, confirming a solid trajectory for the group. The growth continues to be driven by Electrification business, which make up the core of Nexans strategy. It delivered a plus 9.4% organic growth over the period. Let me remind you that this is well above our Capital Market Day organic growth that we have announced last November of a CAGR between plus 3% and plus 5%. This performance reflects the disciplined execution in Transmission and in Grid as well as the recovery in Connect during this third quarter.

Other Activities, mainly Metallurgy, a strategic segment for Nexans, posted a plus 4.1% organic growth over the first 9 months of this year. And as you know, we observed unusually high level of external sales in H1 that was driven by customer bringing forward orders ahead of the U.S. tariff. As expected, this overstocking subsequently led to correction in Q3 2025. The Non-electrification activity declined by minus 6% as expected, given the challenging automotive market. We remain very active to make this disposal of autoelectric, the last remaining activity to finalize our portfolio rotation. So overall, the group growth is at a high level and fueled by healthy growth drivers in Electrification, which remains our main engine of value creation.

So let's now take a closer look at our different segments, starting with Transmission on Page 8. Performance was particularly strong over the first 9 months of 2025 with standard sales above EUR 1 billion, which is up by 25% organically versus last year and with a very strong Q3, up by 33%. This strong performance reflects solid execution, a favorable production mix and a more installation campaign carried out in Q3 compared with last year. Now regarding GSI projects, let me confirm once again that we keep working hand-in-hand with our customers. We have a very collaborative approach with them on this ongoing project that is on track as per schedule and milestones.

Last but not least, Transmission pipeline of activity remained robust, supported by sustained demand for interconnection and offshore projects across our key markets. Our adjusted backlog stands at EUR 7.9 billion, which is up by 27% compared to last year, providing a strong visibility until 2028. So in short, the PWR-Transmission segment continues to deliver, thanks to the quality of the execution.

I will now move to Page 9 on the following slide regarding PWR-Grid. So PWR-Grid sales reached EUR 989 million, which represents a plus 6.7% organic growth for the first 9 months, which also represents a plus 9% in Q3. This reflects solid structural trends coming from replacement of offset grids and the connection of renewables to the Grid, coming from Electrification needs in verticals such as electrical mobility and data center. And it also comes from the high development of our low carbon offers, and I will be able to comment or answer any of the questions regarding this element. Also, our Accessories business continued to be very well oriented over the period. Overall, projects in Europe and North America ramp up under the new frame agreements with major utilities.

So now turning to our PWR-Connect business on Page 10. The net sales of the Connect amounted to EUR 1.7 billion for the first 9 months of 2025 compared to EUR 1.5 billion in the same period last year, representing a plus 1.4% organic growth. You know how contrasted is this segment. We have indeed some strong performing regions with a double-digit organic growth. It's the case for Canada, South America, Middle East and Africa. And so here again, our acquisition of today in Canada will further leverage on wind trend. We continue also to actively grow our tech product as fire safety product with sales growth progressions, which are higher than the market average. That was a key element that we communicated during our last Capital Market Day last year in November.

In contrast, and as you know, some region remains more challenging. That's the case of Nordics in Europe or Asia Pacific, specifically Oceania in Australia, specifically on the residential market. Countries like France, Italy and Spain were quite resilient. And let me deep dive on Italy, where, as you know, we have started our SHIFT complexity reduction program on the new LTC business that we acquired last year. This SHIFT complexity program is completely part of the integration process. So we are currently exiting from low-margin products and low-margin market as per schedule. And I can tell you that the integration process of LTC is going very well.

Moving on now to Page 11. And before we move to the Q&A, let me confirm our full year 2025 guidance, which was upgraded in July. We continue to execute with discipline and focus and remain on track to deliver an adjusted EBITDA between EUR 810 million and EUR 860 million, and a free cash flow between EUR 275 million and EUR 375 million. Let me remind you that this annual guidance upgraded in July is confirmed and does include only 6 months of Lynxeo.

Now entering the final quarter of 2025, we look ahead with confidence. Electrification keeps powering the group performance and Nexans is well positioned to capture this growth with resilience, efficiency and focus. Also, I would like to thank all our teams in Nexans for their commitment and hard work. They are the driving force behind our success on the journey that lies ahead. I am now happy to take on the questions.

[Operator Instructions] We will now take our first question from Daniela Costa of Goldman Sachs.

I want to ask one sort of like more medium term and one a bit more shorter term. So I'll do them one at a time. But given the deal you've just done now in Canada, and I think in your commentary remarks on the press release, you're mentioning that you're moving from -- or Nexans moving from execution to expansion. Can you talk a little bit about how you view the balance sheet? What's an ideal positioning? Should we see this deal has sort of more of a start of a wave of deals in Electrification perhaps? And then I'll ask the second one.

Okay. Thank you, Daniela. So clearly, the capital allocation is not changing. My priority will remain the same. I will focus and accelerate the M&A as per -- based on the same logic as in terms of thesis, basically, which is prioritizing M&As in countries where we are already located in order to reinforce our positions and in order to scale our innovations. And also second thesis is to focus on M&As in countries where we are not. So basically, we'll be looking for bigger acquisitions in these countries. And then the third thesis is also to grow in adjacent to cable, could be around Accessories or any other elements.

And then just -- it sounded like in Q2 that the commentary was very strong regarding the outlook for 3Q on Connect. And I think sort of the market in general had interpreted that maybe more like high single digits or maybe above that, and you ended up with some growth, but relatively modest. Was it something in those countries that were weaker that deteriorated further? Or maybe people just got overexcited with the growth rates after the Q2 call? Sort of what's your interpretation of the deviation there?

Yes, of course. So first of all, Connect is a very contrasted market. We have indeed meet the double-digit growth in South America, Canada, Middle East. That was completely in line with our expectation. For Europe, we were expecting a recovery in the Nordic part that did not happen. So what we have been doing is to accelerate the launch of innovation products. We are launching our more than 10 innovations both in Norway, in Finland and Sweden in order to compensate this. So we will not have any impact in terms of profitability in this area of Europe. On the rest of Europe, we start to see some -- in Q3, we started to see some signals of recovery, specifically in France, Belgium, Italy and Spain.

But -- so it was as strong as you expected at the same dynamics you expected at Q2 or...

So basically, you see the recovery in Q3 in Connect, it's a plus 3.6% compared to -- it's better, it's an improvement compared to Q2. And I expect that Q4 will be on the similar trend in Connect.

And we'll now take our next question from Lucas Ferhani of Jefferies.

I just wanted to have a bit more information on the North America business. So you said it's about 20% of group revenues. Can you say how much it is in Connect and Grid specifically? And also, do we still have that same split between kind of Canada versus the U.S.? And how would you characterize the EBITDA margins there? Would you say that they're higher kind of than group average? And the last point on that North America business, do you see any risk related to copper tariff in the U.S. that might redirect some volumes towards Canada?

Thank you, Lucas, for this question. So I just want to remind that when we talk about North America, we are not in the U.S., we are in Canada. We are well positioned in Canada, and this acquisition will strengthen our position there. The split between Connect and Grid, it's mostly a Connect business, and we are in both, of course, markets, but it's mostly Connect business. And this Connect business in Canada is very accretive to the group. We have an extremely high level of first growth, but as well as profitability, hence, our choice to accelerate this M&A in Canada.

Regarding -- sorry, your last part of the question, the copper tariff. We -- basically, we see that there is no impact for us in terms of copper tariff because we are our own brand in Canada, delivering the market in Canada. So we have no impact for that. on the H1 and the H2 will be as expected. So there will be no specific impact there in this part of the world for the tariff.

And we'll now move on to our next question from Chris Leonard of UBS.

So maybe 2, if I can. And focusing on the Transmission business, obviously, a very good quarter in Q3. Can you update us on the contracts that you're still looking at in terms of the pipeline and saying that there's good growth potential here? Is there anything we should expect for 2025 so that you can reach that book-to-bill level of 1x? And within that, could you also help to give us some color on the U.K. National Grid contract again and just give us a flavor for why I believe you decided not to bid and move into the tender on those contracts. Because so far, the pricing looks very strong on those contracts for Prysmian and as a preferred supplier and NKT, it would be helpful to get any color there.

And then a second follow-up question would be on your comments for GSI saying that the contract with IPTO is going well, very collaborative and on track with schedules and milestones. Is there anything more you can give on visibility of a plan B that you spoke to or your previous management team, I suppose, spoke to at first half results? That would be super helpful.

Okay. Thank you for your questions. I will start and then I will hand over to Vincent Dessale, who is with me in the room today. So basically, indeed, you've seen this strong performance Transmission in Q3 and year-to-date as well. In terms of backlog, you have noticed that we are a book-to-bill of 1 in Q3, and we expect to have a similar approach during the year-end. We are active in terms of -- in the quotation at this moment. We are -- of course, I cannot disclose the number of projects, but we are quite active, and we are positive to do some quotation in Q3, hopefully, with some award in H1 next year. So that's basically the situation.

And regarding the GSI project. As I said, the project is ongoing, extremely good relationship and collative work with IPTO, our customer. And for us, there is no plan B. There is only one plan A, which is keep going and working with our customers to deliver this project. And I will not -- leave Vincent to continue.

Yes. Maybe to give some color and to complement Julien answer regarding the backlog, indeed, we have a great improvement compared to last year, plus 27%. You know it. It has been mentioned with some press release, typically the award of the RTE frame agreement in March and more recently, the Malta-Sicily Project. The pipeline remains active. We have indeed -- and just to give an example because it's public recently this week, Terna has announced a new tender for a major interconnection in Italy. So it just gives an example of the robustness of the pipeline. And indeed, we are quite active on what I would call medium-sized projects and large projects, which are going to be awarded in the next 12 months. So quite active backlog and quite active pipeline in the coming months.

And is there any comment on the National Grid contracts that you guys weren't a part of?

Yes. Sorry, I forgot this point. I will answer to it, of course. But the story for Nexans has not changed. We are -- we have the SHIFT approach in the project, which means that we are very selective in the way we choose the project that we want to target. We have commented this in the past. It's a mix of technical fit, terms and condition fit, how it fits with the other projects that we have already in the backlog. And indeed, when we look at this frame agreement, it was not answering from our perspective to the different criteria. And as I said, we have other opportunity in the pipeline that we consider from our perspective, more interesting for Nexans.

And we'll now take our next question from Jean-Francois Granjon of ODDO BHF.

Yes. Two questions from my side. The first one concerns the acquisition of Electro Cables. Could you give us some more details regarding the current profitability of this company compared to the profit of the Connect division? And what do you expect? You mentioned an accretive impact, but could you give us some more details? And can you give us the EV and the multiple for the transaction?

And the second question, I will come back on the GSI project. So you confirm the continue of the operations. Could you give us the contribution expected from GSI this year in 2025? And when do you expect next year? And I understood that probably there will ramp-up, and we expect a higher contribution in '26 compared to 2025. Could you give us some more color about that?

Okay. So first question regarding the new acquisition, Electro Cables. So this is -- this business is relative to Nexans. It's on Canada for us as well. So both our business in Canada and as well as this Electro Cables is in the upper range of the -- above 20% of EBITDA. So it's extremely relative to Nexans. This business is extremely well positioned in market segments which are for us priorities and fully in line with our Capital Market Day. So the -- for example, the data center elements, the infrastructures, gigafactories and so on. So it's completely aligned with what we want to do. We also see some very interesting synergies from a supply chain standpoint between Nexans Canada and Electro Cables. So basically, that's why we decided to move on and to finalize this deal. So that's element -- first positive element.

Regarding GSI, your second question. Well, you know that we have received EUR 250 million of payments the past months in different parts. So this year, we will do approximately EUR 150 million as part of the -- that was what we have communicated. So we will stay on this type of ratio. And maybe, Vincent, you want to comment for...

Yes. I think Jean-Francois, I think we will not comment in details, of course, the coming revenue for GSI. But as a matter of fact, this is -- you know the amount of this project is EUR 1.4 billion, basically. We have started in '23, so a smooth ramp-up. And after you can consider that you have a kind of linear activity in the first year and with a kind of acceleration in the last 2 years of the project, '28 and '29 due to the installation, which is usually compact in terms of activity versus the production, which is split basically during 5 years. So that's basically the profile of what you can expect in terms of activity.

Okay. And just the additional question regarding that, you expect you confirm an improvement for the EBIT margin for the Transmission division next year compared to 2025?

I think, yes, we will come back on you on this when we'll publish our results in February with a new guidance. But what I can tell you is that we are extremely satisfied with the execution of this -- of the different project ongoing and very proud of what the team is doing at this moment in this Transmission stream.

And we'll now move on to our next question from Scott Humphreys of Berenberg.

I just have 2. The first is a very quick follow-up on the tariff topic. So one of your peers has been speaking recently about kind of increasing their purchases of scrap in the U.S. or in North America. From a kind of European perspective, has the reduction in the amount of scrap that China is importing from kind of North America. Is that having any impact on the cost of your scrap in Europe? Or was the Chinese buyer not as significant in Europe in the first place? So that's the first question. But I can -- carry on, please.

No. So very clear here. So no impact at all in our scrap recycling activities in Europe, no incidents, nothing.

Okay. And the second one, just kind of a broader one on medium voltage. If you could maybe kind of remind us where you are in terms of the process of adding capacity in the medium voltage business in terms of, I guess, Morocco and then you mentioned briefly the low carbon production in France as well. So kind of how are you seeing that the level of capacity in medium voltage given how strong the Grid segment continues to be? And how does that kind of tie in with this additional layer of kind of a focus on production efficiency that you've talked about in addition to the CMD strategy?

So thank you. This is a very interesting and important question. So you can imagine when we grow your business by 9% year-on-year, of course, it has an impact on manufacturing. So here, first of all, I want to remind you that what the job we have done in the past year was to increase the capacity because we anticipate this large increase in the Grid to come. I just want to remind you the acquisition we did in Reka, Finland 2 years ago with 2 civil lines, the announcement of the additional CapEx in Bourg-en-Bresse, an additional civil lines as well as the [ Safi ], which is Morocco new plant that is going to come. So in terms of capacity increase, I mean, we are completely in line with our plans to sustain this growth.

Now regarding the existing footprint as well, we are -- and that's -- and you've seen in terms of communication that we have done in the past last week, basically, that in order to basically deliver our commitments and objective for 2028, industrial excellence will be key. And that's why we are really accelerating today, the efficiency, the productivity and as well as the competitiveness of our plant in Grid. So we have a full program on that, and that's extremely important to continue on this. And maybe one word because Grid is, of course, cable, but as well Accessories, and I will let Elyette to comment on the Accessories as well.

Thank you, Julien. So what we can say is that we are accelerating even further away in Accessories. And indeed, as presented in our CMD, we mentioned that we had anticipated the investment in the plants with automation and robotization. So we are basically delivering at the scale that we announced in the CMD.

And we'll now move on to our next question from Nabil Najeeb of Deutsche Bank.

The first one is on GSI. I think you guys said -- you just said you had received EUR 250 million of cash for GSI so far, and that's the same amount as what you indicated at the H1 stage, which you said should keep you going until early September on GSI execution. So I'm just wondering if you have received any more cash recently? Or are you executing on GSI while waiting for a payment?

And then the second question, given, Julien, you've been in charge of the Grid and Connect business for Europe, I was hoping to get your thoughts on how you see the margin potential for these 2 divisions. I think previously, your predecessor alluded to a longer-term range of around 15% to 16.5% for Grid. Is that a view you share? And what about for Connect?

Okay. So I will start, of course, by the GSI. So indeed, you know the amount of cash we received, EUR 250 million. We have been completely transparent on this. Once again, what I can tell you is that we are working very closely with IPTO in a very, let's say, collaborative way. And we are in discussion at this moment in terms of the next steps of this project on the milestone and payment is part of it. So I cannot disclose anything, but that's, of course, as you can imagine, a part of our discussion. There's also ongoing discussion on political as well regarding the GSI. But on the cash payments, we are close discussion with IPTO on the -- and that's where we stand today.

Now regarding your second question, indeed, the European business, there are 2 streams, Grid and Connect. So Grid, you are right with more than 15% EBITDA in terms of profitability. Here, you need to understand that in Grid, there is basically 3 parts, 3 elements. First one being the long-term agreement with utilities. And here, we are extremely satisfied with relationship with platinum customers that we're having. We have signed long-term agreement with them. In the past, it used to be 2 years contract agreement. Today, we are talking about 4, 5, 6 years contract. So we give us a very good visibility about the long term.

The second part is project base of Grid, which are renewable solar or wind. Here, it's more, let's say, a project for a few months. And this business is extremely dynamic as well in Europe. I mean, Italy is one of them, Greece, or the other parts of the countries. Here, the profitability of this project are also at the right level of what we are looking for and what is in line with our Capital Market Day. And then you have the third activity, which is Accessories managed by Elyette, which is -- and we have communicated that a few times that is extremely lucrative as a business growing very fast because you know that the accessories part is, let's say, the critical element of the Grid. And our customers, platinum customers are replacing that regularly due to the climate change. And that's also giving us the reason why this business of accessories is growing even faster than the cable. So that's basically for the Grid part.

Now talking about Connect. So Connect contrasted, as I said, businesses. The -- let's say, the profitability in Europe is around 13% EBITDA. And we will be growing this step by step with -- because we have growth patterns in our strategy where we will be growing in the sectors in the verticals for us, which matter the most, data center, critical building, injecting new technology of products, injecting new innovation of products. On that point, I think just for you to understand, we are -- in the past 2 months, we have launched Klaro, new innovation in Italy market with LTC. We are launching in September, ULTIMO innovations in Benelux, MOBIWAY in Norway. All these innovations are comforting the profitability of this business and are providing us also some resiliency because we try to avoid being too much exposed to residential and much more, let's say, focused to the market segments, which are going better.

And maybe to add on Julien's comment, just to remind that we have improved significantly over the last year, the performance of the Connect business, thanks exactly to what Julien comment, the SHIFT program deployment plus innovation, which are really the 2 pillars. And if you remember in the last call, we have not given any guidance on the percentage of EBITDA for Connect for very simple reason is that we have an ambition in terms of acquisition and the acquisitions that we do usually are slightly below the average of Nexans.

And we have after the deployment of our integration program in order to bring them at least to the average and sometimes above the average. And indeed, we have -- we know that in the coming years, we'll continue to do this acquisition. So this is basically why we -- how we drive the evolution of the performance of Connect. But as mentioned by Julien, we are confident.

And one more comment, I think what is very important to understand, in the Connect, you can grow very fast and you can take any type of business. But remember, the strategy of Nexans is to be selective. And for instance, in the Nordic in Q3, I asked the team to be extremely selective in the type of project because we don't want to consume cash for projects which are not accretive to our EBITDA. So we took always the decision to select the type of project and choose the one that really bring both cash and profitability to Nexans.

And we'll now take our next question from Akash Gupta of JPMorgan.

My first one is on outlook. So when you raised full year guidance in July, you were guiding double-digit growth in Grid and Connect in Q3, but we saw Grid growth in Q3 was slightly below double digit and Connect was not below double-digit level. And then we also saw some losing momentum in Metallurgy business, which was pretty strong in first half.

So my question is that today, you are reiterating the guidance. But when we look at this guidance corridor and giving consensus is towards the bottom end of the range, where do you expect to end up in the year? Like how much confidence do you have in the midpoint? And how much confidence do you have on the upper end of the range? So that's the first one.

Okay. Thank you, Akash, for your question. So basically, the Metallurgy tariff impact was none at the moment where we upgraded the guidance. So I think this one is -- there's no, let's say, negative impact whatsoever in terms of the guidance for the year-end 2025. Regarding the Grid and Connect, so our strategy is not always to go for volume. It's also to go for profitable growth. And typically, as I mentioned, for Connect parts, even though, as you say, the volume has been slightly below the expectation of the market. I can tell you that the quality of the growth of the 3.6% based on innovation we are doing, secure our guidance for the year-end.

So I can tell you, that's why we will be securing our guidance by year-end. And I will not now comment where we'll be landing because we are still working on it. Of course, you can imagine. But the quality of the growth we have both in Grid and Connect secure our guidance.

And my follow-up question is on Transmission growth. So when we look at the comps in absolute term, I think you will have a toughest comp in Q4. So maybe if you can comment about what sort of growth rates do we expect in Q4? And then when we move from '26 to '25, again, is there any unutilized capacity where utilization can be driver for growth? Or will the growth in 2026 will be mostly coming from project mix?

Okay. So in Transmission growth, you have seen that -- so basically, we will be -- so you may have some spike from one quarter to another. You see a very strong Q3 numbers, 33%. I would say that our growth for the year-end will be first very well oriented and in line with the average of what we have announced in H1, this type of growth level. Now regarding the vision for 2026, maybe Vincent, you want to comment on this one?

Yes. Akash, Vincent speaking. I think you know the story very well. I mean the significant increase of this year is the result of our decision some years ago to make several investments in terms of manufacturing, testing and installation. So it's a kind of expected, I wouldn't say mechanic, but at least expected growth. Now we have a backlog, as mentioned by Julien before, for the next 4 years. So we will be in line in terms of volume with this year because now all the capacity that we have added over the last 3 years are now running and they are fully loaded for the next 4 years. So that's basically the profile of activity for the next 4 years.

And as mentioned by Julien, depending on the different, I would say, planning of the execution, you can have from one quarter to another one, some differences in terms of volumes because you will have more installation, less installation. You know that we do more installation during summertime than during winter time, the usual approach of this business.

And we'll now take our next question from Uma Samlin of Bank of America.

So my first question is on -- a follow-up on GSI. I was wondering if you could help us -- how should we think about the progress of GSI so far in relation to your full year guidance? I think in the previous calls, you had mentioned that even if the project does not go ahead, the EUR 250 million that you have received so far would still contribute enough for the guidance to be hit in the mid-range of the guidance. Just wondering if you can confirm if that still is the case.

My second question is on the PWR-Grid market. I guess we've seen a fair share of capacity expansion there. How should we think about pricing versus capacity expansion in PWR-Grid going forward?

Okay. So GSI, I think I will repeat what I just explained. So basically, yes, indeed, when we -- when the guidance has been raised last July and confirmed today, we completely integrate the GSI elements of the milestone we have with customers. So having no change for that, I can [ contain ] this point.

Now regarding the PWR-Grid, your second question. So it is also a very interesting question. So the growth is there. We demonstrated 9%. The capacity in Nexans -- manufacturing capacity in Nexans is also ready to sustain the growth. And we do not see any change, any pressure on price. Why? Because, first of all, we are -- we have launching low carbon innovations, which are extremely let's say, in line with the expectation of our customers, platinum customers that -- because you may know that the type of medium voltage low carbon offer that we are providing and selling to the market today, they are reducing by 50% the CO2 emission. So you can imagine the importance it has for our customer utilities.

That's why we are able to differentiate from our competitors that are not offering the same thing. And as well as the strong, let's say, no pressure on price in Grid is also linked to the growth we are making in Accessories. Here again, I think you have seen last communication where we are launching innovations on new type of accessories, new joints that are also accelerating the installation phase from our electricians on the field.

And we'll now take our next question from Miguel Borrega of BNP Paribas Exane.

Sorry to come back to GSI, which you say is on track, and there is no plan B. But it seems you're now more at risk than where you were in the first half. If the project is really canceled, what are the remedies? How can you replace the production reserves for next year? And do you think there are other projects out there with such a margin? I'm just trying to understand if the previous 17% margin for Transmission as a whole is still possible without GSI.

Okay. So first of all, the project is not canceled. We are still working on it. They are extremely close discussion on relationship with our customers. There are ongoing discussion on the political side and supported by the European Commission. So I mean this is -- we do not see that as a risk. And we'll come back on that, of course, when we'll have some more, let's say, information to share. But this project is not canceled so far.

Regarding now the -- we have enough pipeline of projects ongoing. Some of them already secured. Some of them are also under quotation. So here, we have so far -- we have no -- let's say, we don't forecast any problem for next year on this part. So basically, on -- maybe Vincent, if you want to add.

Yes, maybe to give you some color, I mean, just keep in mind that this project is what we call a mass impregnated project with deepwater installation. And let's be clear, on the previous projects with this type of technological content, we have been only 2 players to be qualified. So you don't have so many players able to deliver so far this technology. And basically, when you look to all the coming projects in Med Sea, for example, they will all request this type of activity. And today, both players are fully loaded for the next 4 years.

So you can imagine that the other projects coming in the pipe are just waiting the available capacity. So as mentioned by Julien, there is no plan B. Today, we are working with our customers in very good collaboration. And we are already working with some potential projects after GSI, which will be '28, '29, basically.

Okay. And then just a high-level question as you were previously Head of PWR-Connect and Grid, what can you tell us about recent performance in terms of growth and profitability? And maybe some insights on what will be the #1 priority from here on? Is it accelerating top line growth? Is it continuing to expand margins or accelerate M&A?

And then if I just can squeeze one more on Industry & Solutions. I think there's only Auto-harnesses left to be disposed. Is that still the plan? And do you see other areas potentially up for sale?

Okay. So I will start by your last comment with autoelectric. So the answer is yes, it is -- there are still ongoing discussions with potential buyers. And this discussion are progressing. So that we will be able to come back to you as soon as something is a bit more concrete on that. But that's something that is part of our strategy to dispose and to become 100% electrical pure play electrification.

Now regarding the -- you like, let's say, what would be the priorities. But basically, capital allocation is clear because we want to accelerate the M&A. That's really my objectives. I think the announcement of today for Canada can demonstrate it. And we have -- the team, M&A teams of Nexans is also very active with different pipeline. So we will review that very quickly to move on these elements. Growth, yes, but profitable growth, selective growth like we have demonstrated since several years. I think we will continue to do this.

And also, we will be extremely -- and we explained that in the Capital Market Day in terms of innovations. We have a pipeline of innovations. There was recently a big event with one of our customers, platinum customers in France. We have seen a lot of electricians understand talking about innovation. There's a big appetite for innovations. And last but not least is the SHIFT and SHIFT AI that maybe we can also explain to you. That's one of our priority. We really want to grow in this segment. And I will give the floor here of Guillaume in charge of strategy and AI for Nexans that maybe can give some color on that.

Thank you, Julien. Indeed, SHIFT AI is a hot topic for us. Basically, it's the platform from which we develop the Nexans AI solutions. And the choice we made is to amplify and accelerate the SHIFT program that has been very successful for Nexans. We focus on 4 axis: costing, complexity reduction, dynamic pricing, client advanced segmentation. And basically, the idea of SHIFT AI is that when a normal manager uses 5% of the data available, we moved to 20% with SHIFT. And with SHIFT AI, we will move to 90%. So at the moment, we are really in the topic of building up this platform, and we will tell you more in '26.

And maybe just to finish on your question, maybe one of my other priorities, which is for me extremely important, is to work on the industrial excellence, generate mutualization of industrial footprints, both in Grid and Connect because we have here a room of improvement, productivity and competitiveness. So that will be also a key element of my priorities in the coming weeks with the team.

And we'll now take our next question from Eric Lemarie of CIC.

I've got 2, the first one on GSI. I appreciate your various comments on this project, but could you confirm maybe that you're on time with the initial schedule on GSI and that the project has not been somewhat delayed as it is sometimes mentioned by the press? And could you maybe say when you expect to receive the final notice to proceed for GSI?

And I got a second question on the backlog. The backlog on Transmission is flattish, is up year-on-year. I can see that, but it's flattish sequentially this year, around EUR 8 billion. Could you perhaps remind us your strategy here? Is it to properly execute and renew the backlog in good condition? Or is it more to expand the backlog to make it grow further?

Thank you for your question. Maybe, Vincent, you want to comment?

Yes. I can take the backlog, if you wish, Julien. I think what we must have in mind, you have to take a kind of step back, I think. Why the backlog has increased significantly is that, if you remember, in '23, there has been this big move on the market with the Tenet frame agreement, which was basically the largest award of the history of the subsea business, which has basically catch a big part of the capacity on the market. And as a consequence of this major move from Tenet, you have seen plenty of other players placing their tender in order also to avoid a lack of capacity on the market. So '23 was indeed a peak of order intake. So I think now we are more in a normal process because basically, all the key players, we have 4 to 6 years of backlog. So it's quite logical, I will say, that you have a lower activity of tender right now, even if, as we say, it's still very active and very robust. You have the different players have announced award around this year.

But if you follow my logic, you should expect potentially a new peak of order when there will be much more free capacity, which means basically probably more in '27 or '28. And that's why we have said previously that we think that the book-to-bill will be around 1 this year and probably next year due to this -- not due to us, but due to the cycle of the business. So we are focusing to answer to your question to 2 points. First, to execute properly the backlog because we have a good backlog to execute. And indeed, we are looking to the pipeline in order to on time, prepare the next generation of order, which will start basically from '29 onwards. And this means probably, as usual in this business, tendering 2 years in advance before the available capacity.

And just -- thank you, Vincent. Just to answer your first question regarding GSI, yes, I do confirm we are in time with initial schedule, and we are in close discussion with our customers about the next steps. And so that's where we are standing today.

And we'll now take our next question from Xin Wang of Barclays.

A quick follow-up on GSI, given we can't see your financial statements. Can you confirm for the volumes produced since September, are these sitting as contract assets or trade receivables on your balance sheet, please?

Just maybe a clarification because you speak a lot about the production. And I think just as a reminder, a project is not only production. I will not give you in details the detail of the scheduling of the project. But when we -- all what we have done since the beginning of this project is, of course, engineering, testing, production and so on. So when we say that we are on track, as mentioned by Julien, it means that we are on track not only with manufacturing, but also with jointing activities, with testing activities, with engineering activities, and this is basically what we are doing.

So we have produced, I think, probably around 240 kilometers more or less. And indeed, we are continuing with both production and jointing and testing. That's the normal life of a project from a pure -- to give some color on the -- what does it mean from an operational perspective. It's not only production. If not, the project will not progress as planned.

Okay. I think my question was more on for the work you did since September, are you able to invoice them?

So yes, we have been -- of course, we have been invoicing the customer as per normal, as per the ongoing project as per the milestone. So -- but that's nothing exceptional to report as usual, yes.

[indiscernible] is limited so far.

Sorry, I didn't quite get the last bit.

So it's Christine, our interim CFO, which was saying that our exposure is completely aligned with -- there's nothing special to report yet.

Okay. Great. And then my second one is, do you think there is a temporary regional oversupply in Canada since the introduction of U.S. tariffs? Because in H1, it was very obvious that you were exporting a lot more copper to the U.S., which was reflected in very high other activity numbers as you also commented in Q3, this was negative 6.3% year-on-year.

So I don't think so for Canada. We have a very strong growth in Canada, close to 20% growth year-on-year, extremely dynamic. You know that we have 2 type of business, Grid and Connect. The Grid, it's fueled by long-term projects, long-term agreement with customers, utilities. So here, we are very well secured on the visibility.

And in terms of Connect, we are -- what the team is doing is to really focus the activity on the specific verticals, data center, critical buildings. And here, again, there is no -- we don't see any specific additional competition from outside the Canada or from any other country. So basically, we are very well secured in this market, very dynamic with very long capability to grow in terms of construction infrastructure.

Okay. Good to know. And then final one, is the 9% Grid growth margin diluting? Because I think previously, management commented on sensitivity table between organic growth and margin. Is there a shift on how you think about the market?

I can tell you that it's not diluted. This Grid business is extremely profitable. And so no dilution at all. It's -- we are completely aligned. Once again, we are aligned with the target we have communicated in Capital Market Day, both in terms of profitability and in terms of growth.

Thank you. There are no further questions in queue. I will now hand it back to Julien for final remarks.

So thank you, operator. So let me just finish by saying that I believe the solid performance delivered in our trading update today confirm the robustness of Nexans model and discipline with which we execute it. Now we enter into a final quarter with confidence, and we reiterate you have seen and you understood today our 2025 guidance. I'm very pleased to go now on the roadshows and to meet investors in the coming weeks. Thank you again for joining today.

Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.

Hello, everyone, and thank you for being with us today. The call will last about 30 minutes. With us are Jean Mouton, Chairman of the Board of Nexans; and Christopher Guerin, who will share some remarks following this morning's announcement. After their statements, they will share a few of -- they will take a few of your questions. Mr. Mouton, over to you.

Thank you. Good morning. Good morning, ladies and gentlemen, and thank you for joining us. As you saw in our announcement this morning, the Board of Directors has appointed Julien Hueber as Chief Executive Officer, succeeding Christopher Guerin with immediate effect.

Christopher will remain fully engaged until October 31 to ensure a smooth and orderly handover. Over the past 7 years, under his leadership, Nexans has undergone a remarkable transformation, becoming a leader in sustainable electrification with solid financial performance, strong balance sheet and a renewed sense of purpose across the organization. I just want to repeat, this company is in excellent shape.

Let me be very clear. This decision has nothing to do with the company's operation, its business performance, its ongoing projects, or any issue of conduct or behavior. Nexans continues to perform in line with its road map.

The Board decision is about creating a new momentum to deliver on the road map presented during the last Capital Market Day. We want to go further in sustaining Nexans' long-term success, which means strengthening our operational excellence and competitiveness, fostering a more agile and efficient organization to support profitable growth, and deepening our focus on innovation and the adoption of new technologies, including artificial intelligence. These are some of the areas where we see the greatest opportunity to further improve value creation while staying fully aligned with the strategic course we have already defined.

This decision was made following a disciplined and robust governance process, led by the Nomination and Governance Committee, with the support of a leading executive search firm. The Board acted in full clarity and alignment on the leadership profile it believes is the best suited for Nexans' next phase, including by benchmarking against external candidates.

We are very pleased that the next CEO comes from within Nexans. Julien Hueber appointment is a testament to the depth and quality of the company's senior leadership bench. He's been with Nexans for 23 years, has been a member of the Executive Committee since 2018, and has successfully led our largest PWR-Grid & Connect Europe, a EUR 2.6 billion activity with 23 industrial sites. Julien combines deep operational expertise, intimate knowledge of our businesses and customers, and a proven ability to accelerate performance. He is fully ready to lead from day 1.

On behalf of the Board, I want to thank Chris for his exceptional leadership, his energy, his passion. He leaves behind a transformed, respected and confident company, and brought us back in the pack of the leading companies of our industry.

Now before handing over to Chris for his remarks, let me reaffirm a few key messages. First, our strategy on sustainable electrification, presented during our CMD, remains fully intact. Our CMD financial targets and guidance for '26, '28 are confirmed. The management team is strong, experienced and deeply engaged in delivering our strategy. The transition is organized and controlled, ensuring complete continuity.

And now, Chris, the floor is yours.

Yes. Thank you, Jean. Hello, everyone. That's my last call. It's a strange moment for me, but I wanted to share with you that, of course, it has been a very true honor and privilege to lead Nexans over the last 7 years. Together with my team, all around the world, we have been able to achieve a profound transformation. First, to restore trust in 2019 to 2021, and after to reposition Nexans as a leader of -- one of the leader of sustainable electrification with a clear purpose and strong financial results.

So I'm very -- I would say, I'm very proud with what we have been able to accomplish with my team. We have delivered our strategic commitment. We have refocused the business portfolio. We have improved profitability, almost [ by 3 ] since 2019. The cash generation was about EUR 2 billion. Return capital employed in electrification moved from 9% to close to 30%. But of course, more important for me since 2018, we have been able to restore confidence, both internally and externally. So that was the journey.

I'm as well very proud that my successor has been selected within my team, because that's a mark of continuity. We build together a clear work, a strong organization on a very clear mission. So that Julien will continue. So this is for me today, Nexans is a very strong solid and forward-looking company with the right foundation, the right talents, and the financial strength to continue creating long-term value. We need to keep growing organically and inorganically. And I think we -- now, Julien, you have all the means to perform that.

So the Board has decided that now is the right moment to open a new phase of development under a new leadership. Of course, I fully respect this decision, and I will work closely with Julien until the end of the month to ensure an orderly and effective transition. Julien is an exceptional leader. I know him for many years. He knows Nexans inside-out. He has a very deep operational experience and bring a very strong track record in terms of execution. So he has my full confidence. Julien, I'm a shareholder as well. So I'm -- full confidence in him and full confidence his management team.

So I want to thank every one of our employees, and our customers, and our partners. And of course, our shareholders that are -- many of you are connected today, and thank you for your time, your patience over the -- on your trust over the last 7 years in New York, in Boston, in London and in Paris. I made my best to restore the right condition of Nexans. Nexans now entering in a new phase from a position of great strength, and I'm very proud of the legacy I leave, and I remain, of course, fully confident in the company's future. Well, that's a few words I wanted to say, Jean.

Thank you so much, Chris. And let me conclude this first section by saying that Nexans stands on very solid foundations with clear strategy, strong leadership and a committed Board. This transition reflects our shared ambition to foster value creation responsibly, while maintaining full continuity in our strategic direction through structural performance and disciplined execution. We are confident in the company's future and its ability to deliver sustainable growth under Julien's leadership.

You will have the opportunity to meet and hear directly from Julien very soon at the time of our third quarter result publication on October 23. That will be the first opportunity for him to engage with all of you and share his perspective of the next phase of Nexans' journey. We thank you all for your continued confidence and interest in Nexans. And we'll now be happy to take a few questions.

[Operator Instructions] The first question comes from the line of Daniela Costa of Goldman Sachs.

I just wanted to ask a question to Mr. Mouton regarding sort of the immediacy of the transition period, I guess, sort of until the end of October is a fairly short period.

Was this something that you were always planning to do this? Revise what was the change of momentum, or pace, as you said, for the company going forward at this point in time, once certain milestones were achieved? And if so, sort of why the transition so quick? Especially when the company is without a CFO at the moment. That's my question. And then all the best for Chris, and thanks for all the past interactions.

Thank you, Daniela. Thank you for your question. So we had many discussions about this specific point of -- about immediate. The very fact that we were -- we are lucky enough to have within our company, a very strong person, Julien, who's been working with Chris for the last 20 years and particularly the last 8 years on the Ex-Com that we all thought that it was not a good idea to have a too long transition between them. So that's why we said, well, we decide and now Julien takes over. As you know, now comes also the times of the budget. And we thought it was also a good time for Julien to really be in charge and put together with the team the budget for the year to come.

Now concerning the CFO, you had asked the question. So on the CFO, we have Mrs. [ Christine ] [indiscernible] becoming the interim CFO as of [ November 1. ] Obviously, the hunt for a new CFO is very well advanced, and we'll get back to you with the name of the new CFO very shortly.

So the next question comes from the line of Jean-Francois Granjon of ODDO BHF.

Jean-Francois Granjon from ODDO BHF. Two questions from my side. So I understand that you mentioned a new phase for the company. What do you mean more precisely? And why not this new phase with Christopher Guerin and Jean-Christophe Juillard? So to be honest, I don't understand why there's a change?

My second question, you also mentioned the fact that Julien Hueber has a good experience from the Asian countries. So do you expect some more development in this area? And I also wish the best for Christopher.

Okay. Thank you for your questions. So maybe let me rewind a bit. Over the last 7 years, Chris made an outstanding job to bring back this company, as I said earlier, in the pack of the best-performing company of our industry. And he did that I would say, with very, very -- I would say, very complexity reduction, transformation, he explained to you many times, this tool of SHIFT, all these things at the end of the day, created a lot of value for the company.

Now at the last CMD in November of '24, what was presented was what to do to amplify after having done the simplify phase, which means how to develop on a more profitable growth? And in doing so, we identify how important it was to improve on industrial excellence and industrial performance. And hence, since we are doing on a regular basis, a CEO succession planning within Nexans, by that, I mean in '22, in '23, in '24. And this, together with Chris, we had identified a few internal candidates regularly. We gave them, I would say, a track to keep developing.

And hence, in matching what we feel are the right attribute to take this company moving further, we thought that what Julien Hueber had done in the past, and he is currently doing within this company, and by that, having a very strong background on industrial excellence, made him a perfect fit for this new phase of our company. And that's how we decided to end up with Julien. And we do feel that, Julien, who has been really together with Chris from so many years, is perfect just to ensure also continuity as we said. There is no change of strategy, no change at all. The point is to pursue this continuity and have -- from an internal standpoint, having somebody who will take the whole group further.

Now you mentioned Asia. Yes, as you read, Julien spent about half of his time in Asia. I mean, it makes sense now about 25 years, of which more than 10 in Asia. But this does not mean that we have specific plan of Asia. I mean in the various CMD, we explained what is our strategy. But the very fact of appointing of Julien, you should not infer that we have anything in particular for Asia.

So the next question comes from the line of Nabil Najeeb of Deutsche Bank.

You alluded to wanting to create new momentum on the execution of the CMD road map. Could you maybe talk about where you saw momentum lagging? And which specific areas are you now hoping to accelerate progress on? And good luck for you, C.G.

Okay. So on momentum, I mean, let me be clear. As I said, this company is in great shape, but we want to take it to the next level and we want to increase the momentum of what I was referring to, industrial excellence, which is obviously something -- I mean -- and when I say industrial excellence, I'm not at all meaning that we should abandon what we've been doing in the past. It is adding another layer to what has been done so many -- so much successfully by Chris over the last years.

So this momentum is on industrial excellence, enhancing our -- I would say, our competitiveness on industrial operations.

The next question comes from the line of Miguel Borrega of BNP. He got disconnected. So we apologize, yes. Yes, he got disconnected. Maybe we can wait for a few seconds.

There is another question, I think from Elias.

Yes. So the next question comes from the line of Elias Cohen of Neuberger Berman.

I just wanted to clarify one thing. You mentioned utilizing an external recruiting service to consult with you guys to compare internal candidates with external. Just when did you -- when was it that you started to engage with them?

Okay. So let me be clear. When we are conducting this CEO succession plan, we always have been working with a headhunter to support us on a regular basis in '22, in '24, because we do think that it is important in like we do think it is good governance to have this CEO succession plan always ready, which means that we have to go through each time an assessment of the person we think are the closest to the CEO position, and also decide what is then the root, the journey for these people to keep developing. So that's why the headhunter is always active with us on this journey of the CEO succession plan.

Now it is important also to have this headhunter for the benchmarking. Because obviously, when we thought well, we would like to have these attributes, then the question was, have we got the attributes within our candidates internally? And hence, we did a benchmark with a long list of external possible candidates together with the headhunter. And at the end of the day, when we were matching this list, our internal candidates, and what we wanted to achieve, and I repeat again, we want to convey a sense of continuity of what has been done, and adding a layer to what has been done, we ended up and we conclude with Julien Hueber.

So next question is from Miguel Borrega of BNP Paribas.

I just have one for you, Chris. If you were to continue, what would be the next -- the focus? The balance sheet is in great shape. The high-voltage backlog is full, margins are solid. So if you were to choose one, Chris, what would you advise Julien to be the next leg? Is it to accelerate M&A? Breaking low and medium voltage margins to a new level? Or make your high-voltage business shine again?

Thank you, Miguel. So I would say that first, the main topic is the capital allocation. We have a great balance sheet. We need to speed up on M&A. Because if we don't speed up on M&A, we'll have to talk about share buyback or dividend, which is not a problem, of course. But I think we have a great opportunity ahead to accelerate acquisition, and to keep consolidating the market and our position in some key areas. So I think that will be the key focus.

Innovation is, of course, bringing a lot of margin premium in all the business where we have been able to implement. We are getting better and better in the execution of our Transmission business. We need to fix the GSI, but there is some improvement in the last days, but we have other projects in the pipeline that come up.

So of course, I think we still have a lot of gain -- potential gain in industrial performance, on cost competitiveness, because we have been so good in terms of transformation through SHIFT that we know that we have this potential of improvement that we have been not untouched, but I would say, preserve in the future, and I'm sure Julien will work on it. But of course, it's not -- I'm not missing any ideas. I have a lot of ideas, but I will let Julien running the show now.

At this point, I will hand it over to Ms. Aurelia Baudey for closing remarks. Please go ahead.

Sorry, I think there is a question coming from Chris Leonard, UBS.

Yes, we will take that.

Just to follow up. Obviously, it was mentioned earlier that there's been no operational issues or any issues with any contracts. And maybe helpful if you could just allude into what you think is so important on the sort of industrial excellence and what you're pushing for there? And what we should hope to see in the future from Julien?

And then secondly, in follow-up to Christopher's remarks there, is there any elaboration you can give as to what's improved on the contract for GSI in the last few days? That would be super helpful.

Chris, I think we cannot comment GSI right now because it's not the purpose of the call. But Julien will give you an update on the 23rd of October. But Julien is with me with -- and Jean. So maybe Julien, it's time to...

Yes, hello everyone. So I will have the opportunity to present myself a bit more deep on the 23rd. But clearly, to answer the question regarding industrial excellence, we are in an industry where we have -- electrification is entering in the cycle of increasing volumes. And of course, we will demonstrate this month after month. But the -- our industrial footprint needs to create the maximum output that we have.

Of course, we [ do need ] CapEx to increase capacity, but we also have the existing footprint we have. And my priority will be really to generate as much output we have from our plant. That's my one element.

And also, the M&As we did in Europe recently shows also a lot of opportunity to create a lot of synergy between the industrial footprint. Meaning that it's not only one plant, one country, but when you start to create the synergies between like mutualization of industrial footprint, you get a maximum of it, and this is really one of the priorities that we are going to target.

We have another question from Jean-Francois.

Okay. So we are taking the next question from Jean-Francois Granjon of ODDO BHF.

Yes. The last question from my side. On the M&A, you have mentioned recently that you probably made some potential acquisition in the coming months, did you or would you expect with the plan? Is there a risk to see some delays to make some acquisitions due to the change on the CEO or not?

Thank you, Jean-Francois. I will take it. It's Chris. No change.

I just want to reinforce what Chris is mentioning. I mean obviously, we had that discussion, and we said we have a strong company. We have a strong team, and there is no reason to postpone anything.

Thank you, Jean-Francois. I think we will finish with that. It's Chris speaking. So just first, I wanted to thank you all sell-side analysts and investors because over the past 7 years, you have believed in Nexans, you believe in me and my team, and Jean-Christophe. Your trust has been the cornerstone of everything we have accomplished, so I want to thank you sincerely for your confidence, your constructive dialogue, your very tough questions. And of course, standing by us through each phase of the journey over the last 7 years. So I'm leaving with this great gratitude and pride and thank you all and see you, maybe in a different, I will say, journey. Thanks a lot.

Thank you again, Chris. Thank you again.

All right. So thank you very much, everybody. You may disconnect now.

Welcome to our webinar on Responsible Sourcing in the Cable value chain. The energy transition and the electrification of the world require more and more cables, and this will last for decades. In parallel, ESG requirements for companies are no longer an option in order to protect employees, to protect the environment and to protect the society. As a consequence, all the industry players along the cable value chain are adopting responsible sourcing practices.

So today, we will discuss 3 things. One, what is responsible sourcing; two what are the supply chain challenges and the commitments on human rights that the leaders are taking in the industry; and three, what is the role of standards. To do that, we have the pleasure to welcome a distinguished set of industry leaders. I will start with you, Isabelle Hoepfner-Léger, you are General Corporate Secretary at Rexel, a leading distributor of electrical material and a large client of Nexans; Daniel Hojniak, you are Chief ESG specialists at KGHM, and you will bring us your perspective as a copper producer; Mike Smith, you are a Value Chain Director at Copper Mark, and you will discuss about the standard in the industry; and David Grall, your VP Sustainability and Corporate Transformation, and you will bring us a perspective of a leading cables producer.

My first question is actually for you, David, as an industrial company, what does Nexans do in terms of responsible sourcing? What is your definition of responsible sourcing and what are your challenges?

Thank you, Marc, and hi, everyone. Thank you so much to our experts. Responsible sourcing at Nexans is not just a process. It is one of the cornerstones of our commitment towards sustainability and as a leader in the cable manufacturing. It is important for us that our commitment reflects the way we are building up a sustainable future, a resilient future. For us, it's embedding the ESG principle into the way we are doing the business. And every purchase, every meter of cable we are selling to the end customer reflect the respect of the human right, the reduction of environmental footprint and adherence to ethical business.

This is what we have called at Nexans, the E3 philosophy and the way we are operating. But let's go back to the key priorities. First, the key priorities are anchored in the OECD Due Diligence as well as the Global Compact UN commitment that we took. And this is to align our ambition first in order to talk about culture, purpose, while remain compliance with the regulation. The supplier, they have to be engaged as the same level as Nexans is regarding the commitment we took for the sustainability. One of the examples is to have fair labor having the same scoring standardization with EcoVadis, a long-term partnership that we have with KGHM, with you, Daniel. And when it comes to the clients, say, how we work together in order to align the value chain expectation down to the end and this is a current example with the cable loop offer that we have deployed recently in order to recycle the post end-of-life cable in order to reinject in the recyclability ecosystem.

So last but not least, with the client is the traceability from A to Z. So that's our key priority and how we define responsible sourcing, Marc.

Thank you, David. Isabelle, Rexel from a distributor standpoint, what are your expectation and challenges on responsible sourcing?

Well, our expectations are mostly to meet our clients' needs. I mean we love our client, we want to please them. And more and more of them, especially the big ones have their own commitments and they also participate to public tenders where cable is obviously everywhere, and they will expect from us that we provide them the best possible products. We are about EUR 20 billion company. We're in 17 countries. Cables represent between 15% and 20% of our sales, depending on the countries. So it's a very important product category. And in terms of sustainability, it brings the bell a lot because everybody knows about copper scarcity. Everybody knows about the issues from extraction of copper, everybody reads the press and so what happened.

So there are also a lot of questions from our customers on this topic. And the main challenge that we have to meet our customers and clients' expectation is that they follow us when we recommence some choices on products and in order to do so, even if we are deeply committed to sustainability ourselves, we need transparency and data from the suppliers because we are proposing some products with some transparency and some carbon emission and some trustability behind that. We, of course, have to make sure that they are accurate. This is also a good way to select the suppliers and to build long-lasting relationship and also to involve third parties that would help us to testify that the whole value chain is healthy.

Thank you, Isabelle. So responsible sourcing is about environment, circularity, safety, social rights. Let's discuss now about the supply chain and safety challenges. So David, again, a question for you. What are your main challenges in ensuring responsible sourcing in supply chain?

Yes. I'm sure we all acknowledge that we are living in a world of changing regulation. There's carpet bombing regulation, and we can spend like the hours to list this regulation as well as rising client and supplier expectation, the environmental and social risk as well while in the meantime, working on sustainability and competitiveness from A to Z, that is important. This is why in Nexans, we have developed this famous E3 model, E3 philosophy in order to combine in the meantime, the environmental performance, social performance while remain competitive on the economic pillar.

When it comes to the challenges, I will name it in the 4 different categories. First of all, the social and environmental category. You said it, Isabelle. The social is important because we have to face this in an industry where forced labor, human rights, child labor, we have to pay attention is to focus. That's why we are working with a long-term partner, and this is important for us. Environmental, our industry is IGHG intensive in terms of emission. So that's important from us that we are monitoring the entire value chain surrounding that. Regulatory and client expectation, that's key. I will not spend the hour to list, but we call to CSRD, CS3D, TNFD, [ OD ] we have an environmental context regarding regulatory context that is really important.

And this is where you mentioned clients expect transparency and traceability. There's nothing worse than having a lack of traceability from the extraction to the transformation down to the end customer, and this is key, and that's why we are working. And again, with the cable loop offer that we may have, this is important to avoid like reinjection on virgin copper or recycled copper and the way we are dealing with that ensuring supplier compliance. Daniel, we know there's a long-term relationship between our two company. And we want that the CSR adherence on the charter. We want to mirror the standard from the supplier to the end customer. That is key for us.

Last but not least, we can talk about the supply chain disruption. It's obvious that there is a geopolitical context that is at risk today. We have to face potentially scarcity. And this is key for us to keep that. But despite these challenges, responsible sourcing is one of the key levers in order to be sure that we are building up all together through the value chain, a sustainable future.

Quite a lot, thank you, David. Daniel, at KGHM, how are your practices evolving to respond to all these expectations?

Yes. Thank you, Marc, David. I noted four main themes from your speech. So regulatory and client expectations, environmental and social risks, supplier compliance and disruption. So I will start with this last one. So there is no doubt that geopolitical and climate risks heavily affect the world's copper supply. And what is more, it's projected that the demand for copper will raise in the upcoming years. So copper is essential for decarbonization. We need it for renewable energy systems.

We need it for electric cars, which, by the way, require almost 4x more copper than combustion cars. And it's estimated that -- well, International Energy Agency expects shortages of copper in the next 10 years. So it's definitely not the time to panic because it's also estimated that the resources of copper in the world should be enough for at least 200 years. But there is a clear bottleneck between the demand for copper and the supply. So how we, as a copper producer respond to these challenges. When it comes to the primary copper, so mined copper, we obviously ensure stable volumes of supply, but keeping in mind the environmental impacts, for instance, our carbon footprint of our operations and the water footprint of our operations and obviously, conditions for our employees, especially those working underground.

For instance, right now, we have started -- well, we are investing billions of euros in the construction of 3 new mining shafts. And one of these three shafts will be dedicated for ventilation, so to increase the fresh air rates and to increase the amount of cold air, cool air underground, but well, I think that some of our viewers right now might be wondering, but wait a second, what about circularity? Perhaps we should focus predominantly on the recycled copper. And this is where things get slightly more complex because of this market uncertainty, supply volatility of copper scrap is a serious issue. So while we, as a copper producer, we don't have the full control over this aspect. So we do what we can to diversify our suppliers. We do what we can to source these copper scraps locally. But it's not easy because the whole industry is interested in these copper scraps, and there's simply not enough on the market.

And now International Copper Association estimates that the average lifetime of copper in the product is 25, 30 years, while 2/3, so almost 70% of all copper produced since 1990 is still in use. So what that means is that in the upcoming years, these copper scraps are not magically going to appear on the market because this copper is still in use. And it means that there is no simple solution, but we need to balance our approach and focus both on increasing, if possible, the amount of this recycled copper as well as try to reduce the emissions associated with the extraction of the mined copper.

All right. So we also mentioned regulations and client expectations. Regulations, which, for example, require us to disclose on environmental risks and social risks. Well, as well as the expectations of our clients who require from us compliance with schemes such as the Copper Mark or EcoVadis. So I think that one word which links all these themes together is transparency. So the same transparency that is one of the key reasons behind the introduction of the ESG reporting and transparency also pretty well links with traceability that Isabelle and you David touched upon. And when it comes to this traceability from the producer's perspective, it's not that difficult for the mined copper because these are our own operations. We have full control over our processes. But again, it gets quite tricky when it comes to recycled copper because it's simply very difficult to learn the whole history of the particular copper scrap, but perhaps that's the area where schemes such as the Copper Mark could help us just to -- so that we are able to demonstrate that the scrap material was procured in a sustainable manner. Thank you.

Thank you, Daniel. So lots of challenges. You need to work on the environment protection. You need to work on social protection. You need to deal with scarcity and foster secularity. And my takeaway from this discussion is that it requires a lot of transparency and collaboration across the value chain. Let's talk now about the role of regulators and standards. Mike for Copper Mark. Can you tell us a bit more what is your -- the role of your organization across this value chain?

Absolutely with pleasure, and thank you very much for having us on the panel for this, really fascinating and interesting discussion. So the Copper Mark is the leading global responsible production standard for the copper industry. The organization was set up only 5 years ago, but already covers 40% of all mined copper comes from sites, which have received the Copper Mark and 30% of refined copper comes from sites which have received the Copper Mark. So we've already seen significant take-up, which is really, really good news. We cover mine sites. We cover smelter refineries and also semis fabrication as well. So we cover the value chain up to that transformation point. And in addition to copper, we also cover nickel, zinc and molybdenum as well.

And the Copper Mark is for our main standard based around 33 key criteria. And these cover numerous different environmental, social and governance risks. Companies need to ensure that they have taken action around those criteria and they fully meet those criteria before they are awarded the Copper Mark. Those 33 criteria are based on an embedded in international agreements like the OECD Due Diligence guidelines, like the ILO International Labor Organization conventions, UN protocols on climate change. So they are based on these internationally agreed agreements and guidelines. Another really important aspect, I think, around standards like the Copper Mark is the third-party assurance framework that backs up and supports all of the criteria.

Really, any standard is only as strong as the assurance process that you have behind it in order to assure that the aspects have been implemented. We have independently verified third-party assurance and all of the reports are published and transparent on the website as well, which I think transparency is also another key principle. So we have strong incredible standards. But one other important aspect around the Copper Mark is we try to make sure that they're practical as well because, again, you have to have a standard that's able to be able to be implemented in practice in order to drive real change across the industry. Otherwise, you don't get anywhere. And the final point that I would like to make around our approach as the Copper Mark is that we're not focused on any specific points within the copper value chain. We take a full value chain approach.

So in addition to the Copper Mark 33 criteria, we also have a chain of custody standard as well, which enables joined up responsible production through those different points in the copper value chain as well. And we work with downstream industry too with 60 partners who are downstream OEMs and midstream companies who commit to support the Copper Mark and responsible production throughout the industry. So really, that's our approach in a nutshell. And as I say, we've had some significant uptake in success in recent years. And yes, looking forward to continuing to work with some of the companies around the panel in the future.

Thank you, Mike. Daniel a question for you. How do you use Copper Mark standards in practice?

So first of all, we decided to implement Copper Mark certification in phases to our operations. So we started with our smelters, producing copper cathodes. And then we moved on with this process with our wire rod plants. And obviously, we come up with quite a few challenges on this path. So first of all, we had to involve quite a few teams in this process, so environmental teams, safety teams, HR teams, production, teams, compliance teams, et cetera. So you can imagine the amount of resources, even the human resources that were involved in this process. And please take into account that we have a really big organization. We are talking about more than 35,000 people. So that was a significant administrative task.

But obviously, when we achieved certification, it meant some concrete benefits for us. So first of all, well, as Mike just a minute ago, said this is one unified standard, which combines best international practices. And it's a globally recognized tool and so recognized and required by our key clients. So what we did is we merged the requirements of the Copper Mark with our internal policies which obviously had a positive impact on our daily operations. For instance, we developed and implemented due diligence procedure for copper supply chain. And also thanks to achieving Copper Mark, we -- well, we automatically received or demonstrated compliance with the mandatory responsible sourcing criteria of London Metal Exchange, so LME which meant some time that we saved and filling out all these formal issues.

And ultimately, it's again, that's something that Mike mentioned. It's a third-party verified scheme, which is the key thing here because it simply means that somebody else reviewed our operations, our policies. So it definitely builds trust. It builds transparency, and that's -- these are the things that we really care about. Thank you.

Thank you. So standards like Copper Mark are really essential, right, to establish trust, transparency and harmonize best practices.

And the trustability as well, like we mentioned.

Of course. So maybe let's speak about collective engagement, right, in order to build a truly responsible and circular value chain across all the players around the table and in the industry. So maybe a question for you, Marc -- Mike, sorry. How could we strengthen this collaboration to accelerate responsible sourcing in the value chain?

Well, I think the key point here, really, in my view, is there's more to do to really join up the approach that we have across the full value chain. So I think we've made a really good start in terms of the responsible sourcing and responsible production practices at each point within the value chain. But I think there's more to be done in terms of joining up those different points. We've spoken several times around traceability within the value chain. And sometimes traceability and transparency tend to be used in conjunction with each other.

I think the truth is that full traceability from mine to end user is actually very difficult to achieve within the copper industry because the nature of many of the value chains is that copper is mined and then it's mixed, then it's melted, so it becomes a liquid and then it's turned into a solid, then it's melted again and then scrap is added. So it goes through several transformations, which means that if you're looking at traceability on a molecule-by-molecule basis, it's very difficult to achieve in practice. So -- but that doesn't mean that there aren't ways to collaborate and work to improve transparency within the system and also to ensure that responsible production is joined up at every point.

So from my perspective, I think that as well as looking at the ultimate goal of traceability, we should be thinking around things like chain of custody standards mass balance models, which are more able to be implemented in the short term to help to achieve some of that assurance around the full value chain approach with a view in the future once those are in place to move on to full kind of traceability. And I think the discussions like this are absolutely crucial because oftentimes, you'll end up talking to a company in the downstream and a mining company in the upstream, and they're having slightly different conversations around the priorities and issues. But more of this kind of discussion where you're bringing together actors from the upstream, middle of the value chain and downstream, I think are really, really important.

So these are some of the things that we're looking at and working on within the Copper Mark. We want to put forward a chain of custody and particularly looking at some specific pilots around that. We want to develop more platforms and opportunities to have these sorts of integrated discussions. So yes, that's what I would say some of the key challenges and opportunities as well for the future.

Daniel, for you, what are the ways to increase collaboration, transparency and build this circular and resilient value chain?

Yes. So first of all, right now, today, we are representing manufacturers. We represent the distributors and copper producers. Obviously, with you, Mike, looking at our hard work from the above. But it means that we are simply present in each other value chains. So we are on the same team because both we and our clients are interested in products with positive ESG credentials. So low carbon, high recycled content, positive social impact. So by having shared ESG goals and working towards them, we simply meet the expectations of the clients and the society.

Well, one example of such goal could be managing together the production copper scrap, so pre-consumer recycled content, actually something that you, David, today touched upon. I think this is a great idea. And schemes such as the Copper Mark could help us to unify our approach. And together with ESG reporting, increase our transparency and transparency is -- well, transparency highlights the responsibility of the companies we represent for the society and for the planet. Thank you.

Thank you. David, what are your views?

In fact I like what has been shared just by Daniel and Mike regarding the value chain. The image I have in mind is the value chain looks like a strike arrow like this. Why we were talking about -- how can we put circularity. So making like the value chain like linear to circular. And I like this idea because at Nexans sense and not only at Nexans, the entire value chain. What we try to do to reinforce the collaboration, it's how we can build a resilient, transparent ecosystem, And I like this word ecosystem because this is an ecosystem. Honestly, if I talk about the 2 metallurgy facilities that has been rewarded by Copper Mark in Montreal and Lance at Nexans, doesn't be possible If we did not have the long-term partnership with KGHM, for example, as a supplier. That's something that is not just Nexans own operation that is dealing with that. That's why when we are talking about resilient, transparent think Isabelle and Rexel, they are happy to know where the copper is coming from, how we are refining it and that is labelized in our facility in metallurgy. So that's one of the key principle but the way we are driving it at Nexans is regarding understanding the full pain point of the value chain, not only the way we have to deal with because own operations, most of the time, the easiest way to deal, but the entire value chain is not easy. We talk about extraction activity. It's a complex activity. But as well, the distributor activity is not something because we are talking about logistics. We're talking about long distance even if they are local for local. It's key. And when you combine all of that, it's key to understand the value change pain point to co-create. If I don't understand what Isabelle clients and clients request or need I am not able to work with KGHM, Daniel. And so it impacts my own operation. That's the first thing we are driving it.

Second is the communication and transparency. You said it, but it's seems obvious, and it is but we have to reinforce it and prove it. The way we have done it at Nexans is we are building up surrounding the E3 philosophy model like the platform with the data insight. And you know, Daniel, that we are scoring the main customer through the E3, so the 3 dimension. We are scoring our site as well for the 3 dimension. And that's something that is key and data sharing is something that definitely bring and evidence the transparency. So this is the second point. And the last one is how we can work together on the circularity. Together on the circularity because we cannot work along on the circularity. We need end copper or second end copper if we want to reinject if we want to refine the Virgin copper, we need to masterize and we need to monitor the entire value chain for the circularity. And to do this, it requires the strong collaboration.

And I will take just one example. We have invested or we are currently investing in Lance, so north of France, in the new metallurgy facility called NCCCR, that will bring up to 30% of recycled content in the metallurgy. That's something that cannot be performed alone with Nexans own operation. We have partnered with an industrial partner called Continuus Properzi. But then we will need to deal with Daniel and KGHM through this long partnership and deal with Isabelle and Rexel as well to the end product and the low carbon offer or recycled content offer that we may want to deploy. So that's the way I see it. And if I can summarize that, I think we promote the knowledge sharing. And one of the evidence is what has been deployed and organized by the purchasing team at Nexans back in June, the Supplier Day because it was the place to exchange the main idea, all supplier and customer because we are all customer or a supplier at one point of time, how we can deal all together and share this knowledge. That's the way at Nexans, we can see the collaboration and how we can reinforce it.

Thank you, David. Isabelle for you, what are the right way to foster collaboration and build this resilient value chain?

I will bring the last brick of the value chain, which is the whole movement up to the end customer. and use some of your words, alignment is key. We absolutely need environment, but we also need -- or and, we also need very concrete actions. We enter after us a kind of bottleneck where we have big customers. We also have smaller customers. And our role is also to persuade, to sell, to motivate, to educate all the people about the value of what we all together have created in terms of sustainable sourcing and sustainability. So these very concrete actions, we try to develop them.

I mean, internally, we have a cable group with people. We have a very strong partnership with Nexans in Canada, where we deal with the cable offcuts. And this cable group internally has done kind of learning expeditions in different countries to see in which place we can do something, which action we can push, and we need to start small. We need to start local. We need to be very humble because this is the way distribution is and our end customers are. And then you really need to assess what works well and what you can scale works less well and that you have to drop. Because at the end of the day, this is exactly how you will bring the end customer into the whole value chain because, again, without these concrete actions and movements, it will still remain us and we Rexel pushing for some products that they need for some of them, not all of them, and we need to expand the territory of people really wanting to have additional products to make sure the whole value chain makes sense for the years to come. So this is alignment and very concrete actions.

And this is how we turn commitment altogether into action. That's exactly what you said.

And Isabelle, on top of collaboration and partnership, what would be for you the next steps both on the short term but also on the long term?

Talking about what we control, meaning ourselves. So leaving aside geopolitics and the world the way it is, short term is to keep the boat on track. I mean we have a strategy. Sustainability is really a deep strategy for us, as for all of you. We're not going right one day left the other day, we just keep straight. We keep pushing it. What we realize is that internally, our employees just year after year consider that they like being and working for a more environmental responsible company. So we keep that direction. We keep that direction. We keep the discussion with our suppliers. We keep pushing our clients into the loop. We have our sustainable selection. We'd like to have more copper and more cables in it if we have more reliable data to push and do so.

So short term, really keeping what we are doing and not being distracted, but what can happen around us because all the investment that we've put into that, all the strong and deep beliefs that we have, all the economical business case that we build around that will stay longer than what currently happens so that's short term.

Long term, I already mentioned it a little bit. We have to bring our customers into the loop too. And that's not an easy topic. You talked about unified standard, I would dream of it. I would dream of -- instead of talking about -- we're talking about the digital passports, the EPDs that have one language that we can commonly speak to provide our customers with. We provide a lot of services into calculating carbon emissions.

We have a sustainable selection where we push the product. We have an ecoscoring of products. We train and bring on customers into understanding what it means to have less emissive carbon or better source products. But having one unified standard would help the whole profession, I mean, to move towards the same direction massively because the long term is really there, making sure our customers thinks the same way that we think.

Thank you, Isabelle. I think it's time for conclusion. Thanks a lot for your insight. It was very rich. I believe we have a much better understanding of what is responsible sourcing. We've discussed about the stakes on circularity, magic scarcity, protecting the environment, managing social rights. And all of this requires a true collaboration in transparency. I think that's a little bit the keyword of the discussion and great to have all these players along the value chain or the circular value chain show that it's really super important.

I think we have time for a couple of questions from the audience. So I will look at my iPad with some questions prompted. So maybe a first question for you, Mike, the Copper Mark. What do you see for Copper Mark? What role do you see for Copper Mark in accelerating circularity and secondary sourcing of copper?

Thanks very much. In terms of accelerating the drive and demand for circularity, I think as we've heard today, there's already a very, very strong demand and driver to increase the amount of recycled content or scrap that's used within the copper value chain. And that is just increasing, I think, all the time, and the demand is increasing, driven by a need, a, in order to demonstrate the circular economy and to drive circularity but also as a means to reduce the carbon footprint of copper products as well.

So I think the drivers are well established. Where a standard and assurance framework like the Copper Mark can come in, I think, is looking a little bit deeper into some of those recycled content supply chains and considering that within some of those supply chains, there may be ESG risks themselves in the collecting in the sorting and in the processing from an environmental perspective, from a governance perspective and also from the social and labor standards as well. So I think for us, a standard body like the Copper Mark, first of all, it's about the responsible sourcing requirements and that is a requirement within the Copper Mark in order to do due diligence on suppliers of recycled content, but then potentially looking deeper as well around some of those risks within the value chain -- within the supply chain for recycled content and being able to provide assurance that the recycled content that companies are purchasing are responsibly produced as well.

Second aspect is around the methodology, I think, for calculating recycled content. Currently, there are different methodologies for calculating what is classed as recycled content or not within a copper product. So I think that there's a role in terms of trying to standardize that and then also put in place the assurance frameworks, to assure that those are being implemented accurately. So I think those are the two big areas that a standard body like the Copper Mark should be looking at in terms of recycled content and ways in which we can support the industry to achieve that.

Daniel, a question for you. Mining is energy intensive, right? What are KGHM main lever to reduce its carbon footprint while keeping its competitiveness?

All right. So it's a tricky question because as I think David you mentioned decarbonization in general for heavy industry is a big challenge. And now this question focuses on 2 aspects. So the decarbonization and competitiveness. All right. So let me start from the beginning. So I would say that we identified 2 key areas. So the first one is efficiency. So we try to improve the efficiency of our processes. For instance, we implemented ISO 50001 standard for energy management in our operations. Another example I could give is the digital twin technology that we implemented in our smelters. So basically, this allows us to simulate the results of our planned actions in a digital environment before the actual execution. So that was effectiveness, efficiency.

And now when it comes to the actual decarbonization, I feel that I need to give you a little bit of background. So we, as KGHM, we are one of the biggest energy consumers in Poland because basically, we are such a big company, and we are in the heavy industry. So for us, again, it's a challenge because we need to rely on the national energy mix, which in Poland heavily relies on coal. Luckily, this is changing. I'm not going to say at a really high pace, but it's changing positively. But this is the reason why one of our key actions is to build our own clean energy sources. So this is happening right now. So we are developing and building mainly solar farms, and we are also interested in wind projects.

Apart from this, we engaged in power purchase agreements to build -- to buy clean energy from external providers. So this is one thing. Apart from this, we are investigating electric vehicles and our operations also underground. And quite recently, we tested hydrogen trains. So we use trains for many different reasons in our operations, for instance, for the transport of copper ores and copper concentrates between mines and smelters. And this -- the results of this test were very positive. So we were really happy about it. We also investigate carbon capture and storage technologies. This is a technology that changes very rapidly, but we are keeping our fingers on the pulse. And the second part of the question was about the competitiveness. So obviously, all these actions are related to very high capital costs. So we are aware of it, but we are looking at these issues in the long term.

So in the long term, this would mean that we would have our own independent energy sources. We will reduce our reliance on the national grid national energy system. And we will simply cut the costs related to the emissions. So while at the very beginning, this will be expensive, and it's expensive, we are hoping that in the long term, this will have a positive effect on our financial results.

David, question for you. How do you follow up with suppliers that have not signed the CSR charter, and are not compliant, sorry, with Nexans standards.

Interesting question. I would say that from the huge amount of supplier we are working with, we have set up like a methodology that looks like a funnel. One of the entry point is, of course, if they sign directly the CSR charter and they mirror what Nexans is doing is committed to. It's easy. But then if for any reason, we try to investigate with additional questionnaire, like I said before, during the webinar, we were scoring our main supplier through the E3 scoring and E3 performance. And that's something that is guiding us regarding the performance and that is matching our CSR scorecard.

So the additional questionnaire may help us to work on that. If for any reason and mainly for the public and large company, we are still -- and the question remain unanswered. We are trying to matching what is publicly available, what is publicly disclosed and where they are labelized through EcoVadis score. But of course, Copper Mark score definitely, where if public company, they are Copper Mark labelized like you said, Mike, 33 main points, standardized across the entire questionnaire. So that's a trigger. That's a trigger that they are mirroring our CSR commitment. And this funnel is going down to potential specific audit that we are requesting on an external provider because definitely, there is something we are not dealing with. It's the compliance and regulatory staff. So when we are committed towards CSR and ESG as a whole, it's important for us that we are working with partner and I use the word of partner rather than a supplier that are matching our expectation.

I can take like one example. If we are committed to decarbonize and work surrounding ESG, but one of the main supplier is not and not at the same speed or not at the same volume or the same expectation, like we said during like almost an hour that is value chain and ecosystem, it will impact and will be detrimental to one of the others. So that's why this funnel methodology in order to be sure that we are working with the well advanced or most advanced supplier is key for us. And the purchasing team, they are doing a great job through the CSR responsibility in order to be sure that our main supplier, what we call the platinum supplier, they are respecting our standards that are very high. So that's the way we are dealing with it.

Okay. Isabelle, what about Rexel? Do you have a supplier scoring system in place? And how do you deal with that? Do you monitor improvements over time or maybe some alerts sometimes with your suppliers?

We don't have the scoring system. What we have -- well, as you can imagine, we have I don't know how many lines of products, I would say millions, probably not that much, but maybe. So we have a huge amount of suppliers to. What we do is we classify them, and it's the most important one into different categories. And there is one category that we call the shapers because they shape the sustainable future with us. Nexans is part of them, where we have a dedicated partnership on different topics, communications, presentations, products that we push more than the others. So we tend to focus on the few suppliers that are really dedicated like us. We also have our CSR charter. We are also EcoVadis Gold.

So we follow, I would say, most of the rules that you have all described here. This is why the whole value chain is, I will say, consistent and we're talking about alignment and transparency quite openly. So this is where we work. And when we have specific products on which we may have doubts, then we will also perform dedicated audits with the third company to make sure that everything is in line with what we request.

If I may add, Marc, on this question specifically, one of the key challenges we are all facing is not only our facing supplier but the subcontractors that we are working with. And this is where -- and I'm sure we are all knowing what we are talking about. Subcontracting is something we have to monitor and focus on. It's not because we are delegating the task, the activities that were delegating the responsibility. And the world we are living in, the context general context from a regulatory perspective is global. If something is going wrong in one of the subcontractors of Nexans or KGHM. I feel responsible. Nexans feel responsible. And that's why we have to deal with that and perform the appropriate due diligence. So when we are talking about funnel of methodology, it's not something the forefront supplier, but as well the ecosystem that is providing. And that's why it's key to work in a partnership mode just rather than supply model.

I think we have time for a couple of more questions. Maybe for you, Daniel. Human rights and community engagements, which are obviously very critical in the mining sector. So could you share a little bit a little bit more, sorry, how you ensure what is called FPIC or free, prior and informed consent and address local community concerns?

All right. So thank you, Marc. You only asked me tricky questions but that's fine. All right. That's fine. So basically, I assume that the question mainly relates to our activities in the U.S.A. and Canada and our relations with indigenous or native communities. So basically, we have a dedicated team to stay in constant touch to listen and ensure that the native communities feel heard and respected. So well, actually, I have a good example because quite recently, we signed an agreement with one group of indigenous communities in Canada. And it took years of consultation. It took years of consultation, talks, relationship building, participation and cultural events. And right now, it will be our responsibility to work together with these communities and to achieve this balance between economic prosperity and protection of lands and waters and obviously, the rights of the people who live there.

Thank you. Mike, a question for you. Beyond compliance, how do you encourage companies to continuously improve, for example, on human rights or climate action?

So one of the aspects of the Copper Mark standards and one of the inherent values that we have as an organization is constant improvement over time. And so the Copper Mark as a standard and a set of standards doesn't stand still at any point. In fact, I mentioned that we were established 5 years ago. We were already on the third version of the Copper Mark main guidance, and that's because we're always looking at and trying to understand what are the market expectations? How are they changing? What are the regulatory expectations, how are they changing and trying to ensure that the Copper Mark is in line with all of those requirements.

Also for a site that implements the Copper Mark, it doesn't just stand still. It doesn't get awarded the Copper Mark and then we go away and they've got the Copper Mark forever. It's on a 3-year cycle of assurance. So every 3 years, a site that has the Copper Mark will have to be reassured against those standards. So it ensures that, that continual evolution is happening over time, and that's embedded within the Copper Mark standard and processes.

Okay. Thank you. Isabelle, maybe another question for you. As a distributor in direct contact with customers and user. How do you consider your role or added value in the circular economy? Are you an adviser, prescriptor educator, facilitator...

Collector.

All of that. We usually describe ourselves as an influencer. And this is where we are. We are very proud of being that. We are all of that. We have to train our own teams. We have to train our clients. We have to explain we have to partner with the suppliers to make sure we have the right product, the right data, all of that. We are not experts of the products we sell. We do not manufacture them. We're not experts in the copper mining extraction or certifications.

We sell millions of products. But on each of these products, our expertise is to make sure we can provide additional services to our clients especially and sustainable services are a big part of our services now, energetic evaluation, CO2 emission assessment. And in order to sell these services to raise the awareness of our clients, we'll rely again on what you tell us, but that's more our part. We're not manufacturers. So we are just influencers and also teachers, everything you said.

Thank you. Maybe a question for all of you actually coming from the audience. Do you think that AI can help to manage all these challenges?

AI helps us when we try to go through the millions of data that we get on the products to filter them to analyze them and to put them in our system that we have built internally to provide these famous services I mentioned about CO2 emissions. So yes, we have been using AI for years already on data.

I think I have -- yes, I think I have the same insight as Isabelle. So basically, where I see the biggest benefits from the AI is to help us to handle this great amounts of data. So right now, this is again the biggest bottleneck. This is why we all get sometimes a little bit irritated where we receive huge amounts of data regarding, well, any aspect of our operations. So that's probably the key place where this could be utilized and then compare it against other companies or processes.

Yes. if I may add, I concur and I agree with what has been said. And at Nexans, we love to say that we are not using the data at the level we have to use it. I would quote our CEO that's saying that we have a methodology that's called SHIFT, and without SHIFT, our manager, they are using less than 20%, like a small portion of the data available in our system, and we all have a big system. AI will increase the way we will be able to use this data and the capabilities in order to find alternative and routes that we are not seeing as a human analyst.

And definitely, there's -- in our Capital Market Day that happened back in November '24. It is one of the cornerstones. The SHIFT AI modes and to continue to reduce complexity that we have at Nexans and using data is something that is key, and we will continue to use for sure, definitely.

I think that one additional area where I think AI could be useful is regulation. So David, you mentioned at the very beginning that we are being bombarded every month with new regulations. So perhaps AI could help us to handle this and summarize and translate these regulations in the language that is easy to digest for human beings. That could be a good use.

Okay. Maybe a last one for everybody. If you still have some energy.

Always.

How are you fighting players who use unofficial supply chain channels of copper, whatever it means. Difficult one.

From the Copper Mark perspective, so within the Copper Mark, it requires due diligence to be done on all suppliers to a site no matter who they are or what routes that comes from. So companies at sites who are receiving materials from suppliers have to look at the different risks within those supply chains and then take appropriate action according to the level of risk that they identify. So I suppose if you talk about some of these channels, then as and where those become more and more opaque and less obvious, it requires a higher level of due diligence and a deeper level of investigation into those supply chains, which is embedded within the standard. I think that's probably the best approach to take.

From our perspective at Nexans. I think our answer is in Mike's answer, meaning that our 2 main metallurgy are certified and Copper Mark labelized. So and it's important to mention that the proved evidence documentation we have to provide in order to be certified and to conduct ethic business. And remember that what we have discussed at the beginning of the webinar, like we all have business conduct and ethic codes. If we want to comply to all of that. We have to evidence and prove through the documentation, the way we are behaving, the way we are conducting the business, demonstrate that unofficial source of copper supply is something that we cannot deal with. Otherwise, it doesn't make any sense of what happened in this conversation for the last hour. That's the answer for Nexans.

Thank you. Well, I think it's time to conclude. Thanks again for your insight. It was a great discussion. It's great to have all the players along the value chain to share this insight and to collaborate and bring transparency and bring the value chain to the next level. Thank you very much.