Nexans S.A. (NEX) Earnings Call Transcript & Summary

Good morning, everyone. Thank you to be here in London and to be connected online. I know that we have more than 300 people connected this morning. We are very, very pleased to welcome you. I think -- the morning we plan for you on the goal of today is so simple, is to transfer our fervent belief that the most exciting journey of Nexans is the one that will start now. Indeed, the next 4 years will not only continue, but actually accelerate and amplify our recent success. When you think about the last 6 years, the story journey we have been. We have generated a tremendous value creation for our shareholders. And we will keep the core ingredients of what make our success in the last 6 years, and amplify them through new solutions, new services, new vertical supply and supported by artificial intelligence. This is why we are calling this chapter Sparking Electrification with tech solution. It's not to become only -- our goal is not to become only a pure player of electrification, but to grow our difference with new capabilities, new technology to serve the market on our strategic customers with the best solution we can have for the long run. What we are today unveiling to you, has been all about history of electricity. Everything have started in 1890, when the pioneers of electricity, Edison, Tesla, Westinghouse, but as well Benjamin Franklin needed cables to convey the electricity. And that was the first electrical revolution between 1890 to 1910. The second one, obviously, was post World War II between 1950 and 1970. And this is at that time that we've set up all the generations of electricity, but as well all the electrical grid, which are today the foundation of most of the region. At the same time, we were -- in between those phases, we were in a kind of maintenance period. But this is what you can see on the slide here is this is the first time in the history of electricity that both developed economies and emerging economies will request the same kind of components, the same kind of cables and accessories at the same time. And we are entering in the developed economies in what we call the third electrical revolution, but we need as well to keep invested investing in, I would say, develop our emerging economies. So that's the ground of the foundations of the electrification. When we look our market in detail, here, our new brand name for markets with the same, I would say, components inside, G&T is transforming power transmission. Distribution is translated now in Power Grid and usage is translated in Power Connect. When you look at what the core components of the growth of the 3 sectors, they are just phenomenal. We consider that in all the CAGR of those sectors are -- in Power Transmission, we still have a 10% minimum of compound annual growth per year. And we still have a EUR 20 billion pipeline in front of us of interconnections between regions or offshore wind farm development, obviously, in some specific regions. Power Grid, we need to fortify the electrical grid. The Power Grid is the backbone of a nation's economy. The electricity goes through millions of cables every day. When infrastructure fails because of obsolescence, it's not only mean direct asset damage, it's but life stops. You have no more access to telecommunications. You have no more heating system, and you have a limited access to water. This is why each nations are working up at the same time and need to massively invest on fortifying and modernizing their electrical grid, that's the backbone of their nations. Connecting our daily life. We know that electrification is the fastest way for the world decarbonations. This is why we need to connect electrical vehicle. We need to connect solar roof panel. We need to electrify our daily life to onshore a decarbonized world. Of course, I can talk about mega-trends, but let me first focus on mega risks because you know very well the mega-trends. And I will believe that those mega risks will amplify the demand for our product. Number one, we have 12x more power outages today than in the past, induced, of course, by climate events like the one that we've seen recently in Spain or in U.S. And these numbers of power outages will keep surging in coming years. Number two, renewable energies. Great, their development is going in the great directions, and they will represent more than 50%, 55% of the energy mix of the world in coming years. But of course, this induce much more complexity at the grid label. Number three is the convergence of electrification demand from developed economic and emerging economies. The fact that all converge at the same time will create some difficulties of access of raw materials because this is the first time this happened in the history. Number four, for that as well, beyond pure scarcity, we still need to believe that we just need -- we cannot only electrify developing economies. We still have 600 million people that have no access to electricity. You cannot develop education without energy. You cannot develop economy without energy. And you cannot talk about health in your country without energy. This is why electricity matters. The collision of demand of -- for medium voltage cables and accessories from all nations at the same time will create supply shortages. We know that already for a few months. We've seen some -- I will say, some difficulties. Maybe it will not be immediate, but it will come out. The required what we know by Europe now for -- with the evolution of artificial intelligence, the required data and the required energy of data centers, which is over 100 gigawatt, was not part of the strategic planification of any countries, but we need to connect them. You will see in the breakout sessions, all technology about fire safe solution. A fire start in every 30 seconds in the building in the world due to very old electrical architecture. Just in Europe and the U.S., 70% of the buildings have been electrified 4 years ago and need to be entirely renovated. And if we talk about -- if we stay on this specific market, which is building wires supported by distributors, we know as well that from our partner's view that the biggest complexity is not the diversity of that customer, is the diversity of the suppliers, and they will keep producing numbers of cable suppliers on the long run. So all those patterns evolutions are, again, favorable for the market. Prosperity reborn, from struggle to strength, it was a long story. Nexans started in 2001 with ups and downs. You know that. But the last time we had a Capital Market Day was in February 2021 in Paris. And we declare our goal to become a pure player of electrification. Of course, your main interest today, you here physically or online, is to understand and to get more information of what is our next ambition for 2028. But let me reflect a bit what happened in the last 6 years because we are pretty proud about it. First of all, when we started in 2018, I remember this question from a financial analyst saying, how can you reinvent yourself being part of the company, the team in the last 20 years? I think we have been able to demonstrate that. Market capitalization has been multiplied by 6, dividend per share multiplied by 7 and total shareholder returns close to 500%. Yes, I know. That was last week numbers. We couldn't change the slide. If you talk about profitability, so I will let J-C comment the lending of 2024. He will not comment it anyway. But we are generating 2.5x more profit than in 2018. And is 2018 was a bad year? No, that was the average of the EBITDA generation of Nexans from 2009 to 2018. So now we are, every year, breaking the record of the financial of Nexans. Return on capital employed moved from 9% to 20%. If we talk about the high-voltage world, we started at EUR 1.4 billion of order backlog. Now we are at EUR 6.2 billion, and 90% of these numbers is only supporting subsea demand, nothing -- very, very few in regards to land business. You know that we have a unique methodology, which is supporting Nexans' business system called shift. But in the meantime, it's -- we didn't want to keep growing without rethinking our customer and product portfolio. This is why we have generated a massive complexity reduction over the years, minus 40%. What do we call complexity? Number of customers or projects multiplied by number of SKUs manufactured and as well multiplied by point of delivery or point of order process that we need to have to put these SKUs. Minus 40% in complexity, plus 40% in density and scalability. This has bring 20% productivity improvement inside our unit. But as well, talking about other elements that are not financial or not operational, we have been able to reduce by 36% our CO2 emission over the period. We consider today that we still have a massive room to run in the future. To demonstrate it, when you sum all the innovation that we have launched in the last 5 years, 40 of them, 40 innovations supporting the 3 markets that I've just commented. 70 patents per year, in average, have been, I would say, settled in the last 5 years, thanks to our very strong innovation teams and as well our willingness to bring a difference in the market. What is important for you is that we do not start from scratch with this new journey. We are proliferating, deploying those innovations day after day to all regions and to all customers, and we have a branch -- huge numbers of innovations coming up that my team will convey to you. Of course, we need to keep amplify what have made our success, this Nexans business system, which is pretty unique, where we will keep amplifying the evolution both on the growth level, EBITDA generation and cash conversion of all our individual unit. But what is important is depending where you are positioned in the metrics. You don't have the same incentive scheme. Elite drivers are the ones that are already achieving our 2028 target ratios. So those ones will have access to CapEx. Those ones will generate a double-digit growth year-over-year. And of course, I think the most interesting part of what make our Nexans business system very, I will say, different will be -- you will see, will be amplified by artificial intelligence. But I don't want to say much about it right now. Scaling new high to profitable growth. So it's important that we have -- we thought and we think this process over a 10 years period. We have started in 2018. That was the Phase I. When we started in 2019 with J-C and the team, we have lost all our Tier 1 investors in Europe. In U.S., they were already lost 4 years. So we needed to transform the company and to restore trust. So this is why this Phase I was about restructuration, rethinking the model. It could not be about growth, it couldn't be about strategy. It was building the foundations of what will be the new Nexans. And it has been a success. Phase II, Winds of Change. This is the time in February 2021, where given our size on revenue, we declare that if we are everywhere, we are nowhere, we need to make choices. We need to allocate capital in a few sectors. We need to rethink our R&D forces focused on only a few sectors, but it's as well a problem of management bandwidth. This is why we have decided to become a pure player of electrification and to divest the part which is considered noncore. It's not 100% done, but significant progress had been made so far. On Phase II -- Phase III, sorry, it's about amplifications. As a pure player of electrification, we need to amplify and to grow our difference with tech solutions. So in a nutshell, what you will see is 3 core elements: how we will outsize profitable growth runway, how can we make sure that this growth is really tangible in terms of EBITDA generation and free cash conversion. This is why we are injecting new tech solutions that we worked on for the last 2 years, supporting -- supported as well by, I would say, partners that I will highlight a bit later. And of course, new vertical, if we want to become a pure player of electrification we have to be the best supplier for our customers. I know that most of you love the power transmission market because it's high tech. It's not only a question of production of cable, it's as well a question of installations with leading-edge vessels. But what I want to tell you is that we see major patterns -- market patterns shift towards Power Grid and Power Connect. First, supply risk shortage in some core components will drive up grid and connect. Demand verticalizations through specific market sectors and as well with dedicated teams, marketing, services and tech teams for those sectors will drive up value creations. Technological shift, you will see. You will see on the fireproof solutions, but as you will see as well that we will bring new initiatives, thanks to artificial intelligence and with one key partnership that we've just signed a few days ago. On product to solutions, customers on the long run don't want just a cable on the drums. They want pre-connected cables supported by training certifications, services and eventually Internet of Things. If we remain only a component provider, in the next 5 years, we have a high risk of intermediation -- disintermediation. This is why that we need to move from a component provider to a solution provider. This is vital, vital to succeed on the long run in that sector. What is our addressable market? First of all, it's not my numbers, it's not our numbers, it's the numbers of international energy agency. The electricity demand will grow 6x faster than the energy demand in coming years, which is a good news, a good news for the planet, a good news for our children. What is it about our cable market? Our cable market will move from EUR 108 billion to EUR 160 billion in coming years. So that means a CAGR of 7%, but we will inject new value pool to generate more profit, higher customer experience, life cycle solutions and tech stack's improvement in our product. You will see that in all the slides of my colleagues. So it's not only the fact that we are addressing EUR 120 billion market, we are expanding the total addressable market for Nexans with accessories and services that will multiply by 2 that numbers. And of course, tech and digital solution, that will multiply by 4 this number. We will convey the journey of these presentations, these plenary sessions through, of course, first, power and transmission. Pascal will invite you in that journey to follow power and transmission demand. Of course, from transmission, we will shift into grid. And the third, we will conclude by Power Connect. This is my last slide of introduction. Why do we consider that we have a winning strategy. First, we consider that we are part of the best in terms of positioning. 3 main sectors on those 3 sectors have a growth rate, which is twice above the average world GDP. We have a pretty balanced exposure between risky business, which is high voltage, you have apparent guarantees behind that, risk of executions. It's highly capitalistic. So that's the project business that we rebalance with the one that need less capital, have almost no risk which is Power Grid and Power Connect. And we try to have this well-balanced system in our revenue. We have the right assets. We are talking about investment. We already invested EUR 900 million for power transmission only, which are already there, almost. We're just waiting the second vessel to be commissioned. Fully integrated supply chain, of course, the verticalization, access to copper give us an advantage, not only of access, but as well of cost because we don't have any intermediation between us on the mining producer. Right solution, this is what we will demonstrate today, end-to-end solutions, and of course, cable technology that we consider will be the core ingredient of our success in the coming 4 years. Ladies and gentlemen, thank you for your intention. Now, please let me welcome Pascal and Guillaume for Power Transmission.

Hi. My name is Pascal Radue, and I'm leading the Power Transmission business.

Hello. I'm Guillaume Eymery, and I deal with transformation for transmission business.

So you have just heard power transmission is the first step of a journey. We connect large areas of power generation to areas of power consumption, basically take huge chunks of power and send it to the grid. Our markets are driven by the energy transition and electrification. We have a -- we can see in the period of -- until 2028, a market of EUR 28 billion in front of us. That means that translates into 72,000 kilometers of subsea cables that we have to lay. And if you look at the overall project size, then 60% of these projects are actually non-cable manufacturing related, meaning that they're related to installation services, as Chris alluded to, which makes us ideally placed as an EPCI player. There are huge opportunities in front of us.

But this comes with challenges. The interconnectors really shape the resilience of the electrical network. Our industry is scaling up at an unprecedented pace. However, our own estimate is that 1/4 of the cable demand will not be met by 2030. So what does it mean for us? Basically, our clients want us to manage the integration risk for them. This means we have to engineer, manufacture the cable, install and even carry out the maintenance of the projects we deliver. The technology is changing, and it's changing quickly to more powerful systems with much deeper installations and longer distances. The supply chain is under strong constraint, not only due to the lack of capacity, but also because of scarcity of key resources and skilled labor. So Pascal, how do we tackle this?

Basically, with a 3-pronged approach. And you see on the slide here, we believe strongly in long-term partnerships with our clients, but also with our partners that we have and our subcontractors. Why is that? Because it gives us a long-term vision of how our assets are loaded, but also, it allows our teams to learn to work together and stay on that learning curve all the way through the period. That's crucial for execution. I'll come back to that. Secondly, we can leverage our early investments in capacity. We're ready to go now and build the energy transition. We have all the assets. And thirdly, and I'll come back to that as well, is the crystal-clear focus on execution because what matters is execution of the energy transition. Now let's look what our clients say. [Presentation]

So last time we spoke to you, we made a promise to focus our investments in the transmission business. We kept our promise. We invested EUR 560 million in our assets. With that, we grew our business. We didn't just grow it, we changed its scale. We doubled our asset base, more than doubled it, and we more than quadrupled our backlog. And in parallel to that, we build a project backlog where the top line is actually secured to 80% by -- for until 2028. So 80% of our topline is already secured now until 2028. And of that 80% of top line, 90% is with TSOs, which makes us really stand on a rock-solid foundation. Let's look at -- let's have a deep dive -- quick deep dive on the assets that we got for the EUR 560 million. They're mainly manufacturing plants and vessels, installation vessels. Both asset types are brimming with technology. And this technology is so cutting edge that we have decided to patent 70 features of those assets. Let's look at the Electra. The Electra is our new flagship, which we'll have in 2026. When she leaves port and sails, she takes the equivalent of 1.3x the Eiffel Tower with her in cables, sail somewhere to the sea. She lays these cables in up to 3,000 meters of depth. And one cable can carry the equivalent of 1 gigawatt of power, which is the equivalent of a nuclear power station at any given point in time. So we're pretty happy with the assets we have. But we, of course, look into the future, and we'll invest further if we have the right frame agreements and financial supports. But we're not just investing in assets, we're also investing in technology.

Whenever you want to install offshore wind farms, you need to fulfill 2 conditions. The first one is that you obviously need to win the area. Second, you need shallow waters. And the floating wind technology will enable areas lacking shallow waters to install offshore wind; for example, Mediterranean Sea or California. But this comes with challenges. Why so? Because as they are floating, we need extra high-voltage cable that are flexible, but not flexible onetime, they have to sustain thousands of flexion cycles. It's about leveling up the technology level of cables. Nexans has invested with partners in this know-how more than EUR 30 million. And we see power from shore projects as a short-term opportunity to use this know-how. But while we prepare the future, we have to deliver the now.

And the now is all about execution. So how do we make sure that we get execution right. There are basically 3-prong -- 3 pillars we build our strategies on. Number one is we choose our projects very, very carefully. We make sure we have the right technology. We make sure the project is at the right geographical position. We make sure we -- it's the right client, and we make sure it's the right timing. With that, we are standing in a rock solid foundation before we even start execution. Let me go into the execution phase. And what counts in execution is making sure that you get the quality right first time, making sure that you deliver on time every single project. And thirdly, making sure that these projects are delivered with the right tools and processes that allow financial control of the project. So we can make sure we deliver the final promises -- financial promises that we give to each other. And we do that for every single project. And the third pillar you see is about asset optimization. We don't just build one project. We build 30 projects concurrently. So these assets that you saw before, they need to work together seamlessly every single day. We do that today with tools and processes and people. Tomorrow, we're going to take one step further.

We will tell you much more about Nexans and the AI during the breakout session. But this use case is very exciting, and please let me bring you through it. Just imagine, 3 plants, 3 vessels, 30 projects running together. They are linked. This business is weather-dependent. It's a volatile environment. Things are changing every day. So our teams run complex calculations. They build up scenarios to anticipate and mitigate the risks. But this is not only about mathematics. It's about experience, and experience is reflected into the data. It's about having an intimate understanding of what our business is about. So a simple BI can simply not do it for you, but AI can. And with our partner artifact, we are developing an AI-powered asset optimization tool that will enable us both to accelerate the construction of scenarios, but also to amplify the capability we have to mitigate risks. And the ultimate benefit is for our client.

So let me wrap up. Power Transmission is 2 things we will need to take away. First, we promised that we have a laser focus on our investments. We kept our promise. We've got an asset base ready to go and build the energy transition now, it's ready. Secondly, we are invested in execution. We heavily invested in execution. And we'll have AI solution that make sure our performance can reach the next level. Thank you very much. With that, we go on to the grid. Vijay?

Thank you, Pascal. Thank you, Guillaume. Good morning. I'm Vijay taking care of EM, AMEA, Grid and Connect.

Good morning, everyone. I'm Elyette Roux, Vice President for Power Grid and Accessories.

Electrification is accelerating, and so is the grid obsolescence. Increasing demand for electricity in one side, and the supply side renewables are adding to the grid. With this integration of these 2 into the existing grid, which is already old, is adding complexity and challenges to us. Why? Because the grids in Europe and in America are already several decades old. We have extreme climate conditions, which are accelerating this obsolescence, and thereby, we have a lot of outages. We are currently in a perfect world for blackouts. This is a recipe for blackouts if we do not change anything. However, all the grids will have to be modernized, and we have a very good position to have opportunity to grow with this. Elyette?

Facing those mega risks, we all need to add or replace 80 million kilometers of power lines worldwide by 2040. This is the equivalent of 200x the full tour. So clearly, our grid have a huge, massive and urgent need for modernization and extension, driven by 3 main growth levers where double is the magic word. Double the CapEx from 3 major European DSOs, grid operators. Double the project investments in data centers, electric vehicles and gigafactories. Double the project investment in renewables worldwide. Vijay, how are we addressing the consequences of this growth?

This is hyper cycle of investments in grids. What does it mean for us, more kilometers of medium voltage and low voltage cables, more accessories and solutions. For the next 5 years, we have a great opportunity. The grid is growing at the rate of 7% per annum. This is actually more than 2x the global GDP. On top of it, the renewable projects are also growing in double digits, and it is twice that of the grids. We have anticipated this great demand and increased our production of cables and accessories in our sites. This would allow us to grow even faster. However, the growth is not just easy because we have challenges. What are those challenges? We have shortage of metals, shortage of capacity and shortage of labor. Skilled labor is absolute shortage. The market is moving away from product supply to solution supply. Above all, the new challenge is the grid resilience and reliability. Technology matters, and this is the need of the hour. So we have a fantastic possibility, and we are future-ready.

Indeed, Vijay, we are extending our investments in increasing access for advanced cables, more advanced cables, accessories that are connecting the grid and critical competencies. We already made early investment for 50% additional capacity in more advanced cables worldwide. And why are we doubling on accessories? Because let me remind you all that 80% -- yes, 80% of the power grid failures worldwide are due to the connecting accessories. So we leverage digitalization, robotization in our plants worldwide to bring our quality and capacity and accessories to the next level. And why are we doubling on services and trainings? Because also, let me remind you, that 60% of the failures of all connecting accessories are due to human installation mistake. So we had certifying trainings to tackle the shortage of qualified labor force. With our solution with these investments, we offer end-to-end solution to decrease the network complexity, to decrease the carbon footprint of the grid and to decrease the project risk. Overall, our solution makes the grid more resilient for the future. And resiliency of the grid is a key and core topic given its increasing complexity. So how are we addressing the complex grid?

The market of grid is moving from a commodity type of business to a value specialized play. The grid operators need specific tailor-made solutions depending upon the regions they operate, the condition of the equipment and also the deliverables what they have. In mature markets, the grid is very old. They are into the modernization phase, and they need technical solution, technology solution to support their grid resilience. On the other hand, when you move to the emerging economies, the grid are relatively young, and they are in expansion phase. They need our handholding. They need more of beyond cable solution. They need equipments. They need transformers and substations. And above all, they need technology to improve their reliability. The need for overall projects for renewables is entirely different. They are project-based, and they have -- need agility and timely completion of the projects. This is a pure -- as a pure electrification player, we know the pain points of all our customers, and we are able to customize the solution and give a tailor-made approach to them. Let us hear the testimonies of some customers. [Presentation]

We listen to our customers and to their differentiated needs by moving from a low specialty play to a high specialty play. We create structural value increase with our customers and for our business. Our Nexans value creation scheme relies on 3 main drivers: one, an enhanced customer experience. Second, life cycle solution for a sustainable grid. And last, our digital and tech stack for a smarter grid.

This is win-win model. We will show the way how these 3 levers are going to help in creating a structural value to us and also to our customers.

We revolutionized the grid. Whether it is for renewables projects, for grid extension and modernization, for electrification projects of data centers, gigafactories and electric vehicles, we move away from basic offers. First, we enhance customer experience with new tech products, packaging, bundling accessories with cable and bringing a superior service level. We are making the grid safer, easier and faster to install. We innovate with life cycle solutions, bringing high environmental impact, decreasing down by minus 50% the carbon footprint of cable systems. We are making the grid more sustainable worldwide. Finally, we augment our tech and digital stack with first Internet of Things, thanks to sensors, thanks to smart accessories, but also adding geolocation and antitheft of drums, assets, combined with digital and artificial intelligence services. We are making the grid more resilient and smarter to operate. With this revolution, 40%, yes, 40% of our power grid revenue will shift to advanced offers by 2028.

In Nexans, we invest in digital services and also in artificial intelligence. This is purely to improve the reliability and the resilience of the grids. We will show the way, and we will lead the way.

We augment. We expand our tech solution from grid monitoring to prevention and prediction of faults on the grid. These technologies enable grid operators to quickly detect and repair the faults when they happen, while also reducing the incidents by identifying the early signs of failures. We -- with these solutions, we power our customers with the right data to take the right decisions at the right time for the grid resilience. The best is now to hear from one of our grid experts.

In the context of growing electrification and massive integration of renewable electricity, our energy grids are being stretched to their limit. In many countries, electrical infrastructure was built decades ago. And now a significant portion of these assets, especially cables, have reached the end of their theoretical lifespan, knowing that 70% to 80% of power outages in medium- and low-voltage networks occur along cables and lines. These assets are critical. This is why 24/7 real-time monitoring of power cables has become an essential tool for power utilities. These technologies enable utilities to quickly locate and repair the faults when they happen while also reducing incidents by detecting early signs of failure. The technology behind cable monitoring is composed of 3 key building blocks. First, noninvasive sensors coupled with edge computing electronics are placed along the cable infrastructure that continuously measure and preprocess data on the cable performance. Second, a cloud data platform allows for the aggregation and storage of the data transmitted by the sensors to provide a permanent high-level visibility on the grid status and environment in real time. Last, artificial intelligence algorithms analyze the data sent to the platform and build the models capable of predicting and anticipating incidents. These systems have long been used in high-voltage grids, but the next wave of deployment is in medium- and low-voltage network, where 90% of renewable energy sources are connected. Thousands of these systems are already in operations. And in 2024, Nexans and its partners have installed green monitoring systems in 5 continents. Nexans real-time green monitoring solutions portfolio enables power utilities to modernize their network and reduce outages impact by up to 50%. These technologies provide data-driven insights to operational teams helping them anticipate issues and shift from a reactive emergency management to a predictive preventive approach fixing problems before they occur.

Heard about how we are improving the resilience of the grid worldwide while we are improving structural value increase in our power grid revenue. Now let's hear about the next step in the electrification value chain with Julien and Jerome.

Good morning, everyone. My name is Julien Hueber. I'm in charge of Grid on Connect for Europe and Asia.

Hi, I'm Jerome Fournier, Corporate EVP, Innovation.

So we'll follow the flow of electrification. And now we'll be talking about Connect, Power Connect, which is the last mile of electrification. We will focus mainly on the value creation in this market. You heard previously in the presentation, the mega-trends, which are also true for this Power Connect market. We talk about urbanization, electrical mobility, and more data requiring more electricity. But also, we are focusing on the mega-trends, which are generating from -- amplified by mega risk. Mega risks are typically the lack of -- the shortage potentially to come on metal in the supply chain disruption. We're having also fires, which are damaging life and destroying real estate. We see that coming from obsolescence of electrical infrastructure in the buildings. We are seeing as well a shortage of qualified electricians that are slowing down the constructions and slowing down the development of this market. We are -- while we are seeing this mega risk, we are also having at this moment a major shift in this market. Digitalizations, our customers, electricians, installers are using their phone in order to access to technical information. They are using their phone to get online trainings, placing orders and follow up deliveries. In this market shifting, we're also seeing the emergence of new verticals that did not exist a few years ago. These are what we call the electrical intensive markets such as data centers. And we'll come back on that more in detail just after. The market is shifting also to more digital. The traditional PVC type of cable is slowing down, but we see an increase in growth, twice faster, for halogen-free fire safety products. So while this market is shifting, our customer is having challenges. Our customers are expecting from their partners more solution, more technology and more digital. And in Nexans, we have anticipated these changes, and we have built already, and you have seen that in the previous -- earlier this morning, the Vitality Index providing new products, new solutions and more technology products. We are also building with our platinum customer digital tools in order to get efficiency on the supply chain. We are expanding these solutions to all geographies in order to answer to our customer needs. We have one clear conviction, is that this market, Power Connect, is not any more a commodity play. The one size fits all is over. We believe, and we have clear conviction that today this market is moving to specialty place with different market insights, 4 of them: residential, infrastructure, critical building and special projects. Each of them has different pain points. Each of them has different appetite for technology. And we will solve the problem of our customers by focusing to each of them in any difficult matters. By answering to the special play, this is the only way to answer to our customer needs, and this is the best way to create value. Now, if we zoom in these different markets, you will see that overall, the CAGR is 5% growth year-on-year to come. We will, of course, remain a leader in residential, but we have decided to focus, allocate more times, invest technology and develop more solution to 2 of them, the critical building on the special project. This is going to be our main focus in the coming 4 years. The critical buildings are, in fact, verticals where you have a high density of populations, where you have high safety standards. This is usually public buildings, hospital in the health care, large commercial or large industrial projects. This market requires specific needs, specific technology, and we are here to provide an answer to this demand with our fire-resistant on fire-retardant solutions. The second market is what we call Special Project. This is mainly data center on gigafactories. And here again, they have different requirements with energy monitoring or even more agile supply chain with a fast installation time. These 2 markets will enable us to create more values, but most important as well, will be a way to reduce our exposure to different demand cyclical. We have -- I've spoken several times about data center, and I propose that we deep dive on the data center.

Data center is a very good example of the market shift. The global capacity of data center is expected to double over the next 5 years. This is not only a huge addressable market in volume for Nexans, it's also a shift in quality and technical specification from commodity to innovation. Actually, 10 years ago, data center was smaller than today. And nobody really cared about the cabling system because it was a very low stake. Today, the data center increase and even more tomorrow, they could reach 500 megawatts, and there are projects in the future from 1 gigawatt data center. So it's all about energy management. And every percentage counts. So there is a focus on the cabling system, but data center, they are obliged also to care about generation. They will invest in their own renewable generation. They have to care on the connection to the grid. They have to care on the medium voltage and the low voltage. Today, the global consumption of data center worldwide is the equivalent of the need of Germany, it's 3%. And we expect that to increase to 10%, which is more than India. So that's going to be huge. So there is a need for a more efficient cabling solution. And this need is very clear; first, energy efficiency. Second is reliability -- electrical reliability. Third is the time and the cost of installation. And four is sustainability. Nexans has developed solutions and expertise to power up data center. The core of our offer is technical product. It's -- all those cable will be halogen-free fire safety cables. We will or we do offer services just-in-time delivery inspection, certification, digital supply chain. And we do offer new technologies, engineering. There is a great interest and superconductive link as a first connection and monitoring of those assets. But data center is not the only market where there is an interest in technology. It's also the same in renewable energy, in EV charger system and critical buildings. So let our customers speak out about innovation. [Presentation]

So customer satisfaction is so important. And in Power Connect as well, it's all about technology, data, customer experience. We have developed a range of projects that make installation easier. I mean, we have been working during the fall last year on design thinking and customer experience. And our latest innovation, MOBIWAY POP dispenser is able to reduce by 70% the number -- the time of uncomfortable position and 38% the pulling time. This is a resounding success. There is a real description within the field of wire and cable. One of our customers said when we presented 1 year ago, it's exactly the same as coffee, which was a commodity before Nespresso has disrupted the business because those capsules will be the wires pool. And this MOBIWAY POP is a connected equipment. It does allow to measure the residual length of the wire. It allows to a real-time stock management and automatically reorder pre-fill. It is the really first time that we have connected packaging or accessories for wire installation. We've taken the leadership in this type of innovation in customer experience, which make Nexans the preferred brand of our customer.

So we are convinced that this market has changed. It's not anymore a transactional with a quotation type of transaction with our customers. We have moved to a specific enhanced offer per vertical. And we have been a structural value creation model for that. In each of our quotations -- in each of our offers per vertical, we will have 3 steps systematically. The first one being customer experience. The second one, the life cycle solution. And third one, tech and digital solutions. So in the customer experience, we have plenty of different smart packaging. You have seen one example just here with MOBIWAY. We will be also using the strength on the branding power of Nexans. A few months ago, we did in Europe a survey to our customers, to more than 500 electricians. And clearly, Nexans was the preferred brand. So we will use this reputation also in the market. The second element in life cycle solutions. Here again, we will offer, and we already started systematically low-carbon product, either recycled polymer or recycled metal.

And finally, technology is playing an increasing important role in this last mile connection. There is a need for fire protection solution for digital technology, for digital sales, for the direct current is now a standard in high voltage, but it's also occurring medium voltage and low voltage, so that's LVDC. And there is a need also for monitoring, not only the health of the network, but also electricity consumption.

To summarize, we have built a recipe for value creation in Power Connect. This is a combination of 3 elements we just presented: enhanced customer experience, life cycle solutions, injecting more and more tech and digital solutions for our customers. Combining the 3 of us will put us away from the cyclical of the demand. And most important, we will generate more than 20% EBITDA, and we will expand this to different geographies with a repeatable model. So we know where we are going, and we know how to do it. Now innovations and transformation capabilities is key for value creations, and I will let Chris to continue on that. Thank you.

Thank you, team. Let's have a quick word regarding innovation. So as I sum up what the aim is to say, we don't want to be just a cable provider on a transactional mode. We want to enhance customers' experience with design, deliver enhanced experience, supported by designers. That's a job that was not existing 4 years ago. Now we're hiring specialists in design to rethink our product. Life cycle solutions, all our R&D is focused on life cycle solutions with low carbon polymers, and of course, with recycling activities, or I would say, investment that we have just launched recently. On tech stack, we have higher competence in IoT, in digital solution to really provide a different approach on the repeatable model for our customers. This is why that our commitment is that 40% of the revenues will go from basic, so first, just pricing of cables on the drums to all these life cycle approach from customer's experience to tech stack. But we need partners. We need partners to enhance that. So first -- the first one is the one that we've launched in 2021 with Schneider Electric. With Schneider Electric, we work intensively every day unit by unit in terms of asset optimizations, robotizations, automations, of course, to enhance the digitalization of the process, to better monitor the productions and the quality of the product. But as well, now we've just injected with Schneider Electric artificial intelligence to better control and prevent any risk, safety, but as well quality. Where are we? We are at the 67% progress ratio. We have already 40 -- 30 sites that have been deployed since 2021, and we still have 15 sites remaining. So it will be, I think, achieved before 2028, thanks to Schneider Electric. SHIFT, you will have a full demonstration of what artificial will bring into SHIFT. We know that a lot of companies are deploying artificial intelligent -- intelligence, specifically to reduce their cost and to automate some processes. We have decided to use artificial intelligence for pricing matters, product costing improvements, complexity reduction improvement because this is what Guillaume and [indiscernible] will show you in breakout session. A manager today is using only 4% of the data available in the ERP system. What we have achieved in the last year is that SHIFT is using 20% of the data available in the system. And artificial intelligence will use 100%. So this is -- all this complexity from our business, our data systems that artificial intelligence will help us to solve in the coming years. You know that topic. I'm very vocal about the risk of scarcity because, of course, if all countries goes in the same direction all together for greater electrification means more copper and more aluminum are required. So the risk of scarcity will come in coming years. This is why we've signed with Continuus-Properzi a specific agreement on investments in order to be able to recycle more than 80,000 tons of secondary copper per year. 80,000 tonnes is equivalent of a small copper mine in Peru. So it's not negligible. We know as well, and you have seen, you have listened through customers' interview that customers are willing to pay a premium for sustainable product. This is what Nexans will be able to do with a full traceability of where can they come, come from the west, but as well all the verticalization of the offer. We will be able to trace the CO2 emissions, but we will be able to bring to customers cables with 100% copper recycled and as well 100% recycled polymer. And that, we believe will bring a price premium to the market. Talking about price premium, we need to talk about financials. Now please welcome J-C that will elevate the financial results of the group. Thank you.

Good morning, ladies and gentlemen. I'm Jean-Christophe Juillard, the Deputy CEO and Chief Financial Officer of Nexans. I would like to take you for the next minutes on our journey through 2028. Before I start with our ambition of 2028, I will just spend a few minutes talking and looking at the back -- at the past 4 years and the commitment we took 4 years ago, February 2021, when we put some ambitious and bold financials 4 years ahead of us to transform the company. So if we look at where we were in 2021, where we are at the end of June, last 12 months at the end of June 2024, almost at the end of this chapter before opening the new chapter, you see that we have done quite well in terms of financials. You look at the first important metric, adjusted EBITDA. We have been at the target. We reached EUR 723 million adjusted EBITDA at the end of June, 12 months, margin having increased 300 basis points between '21 and 2024. If you look at the margin evolution, basically a lot doubling in distribution, power grid, and 60% increase in margin in Power Connect. This is a 56% improvement -- margin improvement between the 2, period '21, June '24. Cash has also been quite strong. Normalized free cash flow reached EUR 362 million at the end of June, 12 months; 50% normalized cash flow conversion, thanks again to our Transformation platform, SHIFT, reduction of complexity, pruning our SKUs, selecting our customers and basically improving our working capital significantly. The commitment we took in 2021 for working capital was to be below 6% during the equity story through '24. We have never exceeded 2%. And of course, conclusion of that, better margin, better earnings, reduce working capital, management of our assets and, basically, a return on capital employed that improved by 4 points over the period. And if you look at Electrification, the increase is even higher. We reached 22% return on capital employed for the Electrification assets. This is a commitment we took in 2021. You have basically the group commitment, financial commitment and the Electrification business' commitment. You've seen that for all of them, you've seen a green spot we have either achieved at the group level or we have exceeded quite significantly at the Electrification business level. Of course, we are not yet at the end of the year, but very close to the end of the year. And we'll confirm and we have guidance again July to confirm the upper part of those figures. So quite, I would say, nice and expected for us, commitment achieved. In terms of cash also, as I was saying in the first slide, we've done quite well on cash. If you look at the 2 periods of the commitment of 3 years of the equity story and what we achieved between '24 -- '21 and '24, the 4 years, we've generated EUR 1.4 billion of normalized free cash flow. I remind you, normalized free cash flow excludes strategic CapEx investment we've made in generation and transmission, versus EUR 600 million over 3 years commitment we took in '21. This is an average EUR 150 million extra additional cash flow generation compared to the commitment of the equity story. In terms of how we have allocated, spend that cash, you see that 80% of that cash was devoted for growth, whether inorganic growth with M&A or organic growth, investing massively CapEx, mainly again in power transmission, generation and transmission business. We've done that still protecting the balance sheet. We have never exceeded a leverage of 1x net debt to EBITDA. In fact, most of the equity '21, '24, we were ranging between 0.3 to 0.67x net debt to EBITDA and, again, despite the fact that we've done more acquisition on the equity story than divestment. So that's thanks to the very strong cash generation of the company. And that helps us, obviously, to improve our rating with Standard & Poor's and move from the BB with negative outlook in 2018 to a BB+ rating as of now. One word maybe on non-Electrification. You know that the business -- noncore business, we want to divest. They have done also quite well. So I mean they have been part of the renewal, the rebirth of Nexans and the performance of the company. You see that revenues have increased significantly, about 25%, but also margin has improved by more than 2 points margin over the period. So this is one of the reason we got a lot of questions about when those assets were going to be divested from the group. We always said and committed to our employees we will divest the asset when we find the right buyer, the right time for the right multiple, and we are getting close to that now. But again, those were good assets and did not harm the company at any point. And we always said that we'll do the right transaction when time comes. Let's talk a minute about also in '21, '24, have done -- how well we've done on the rotation, because as you recall, in 2021, we said we would be a pure player of Electrification by '24. We are not quite there yet. We've done the job, I would say, on the M&A side. On the acquisition side, we acquired 3 iconic prestigious companies, Centelsa in 2022 in Colombia, Reka Cables in Finland in 2023 and La Triveneta Cavi more recently. We closed the transaction in June in Italy in June '24. Altogether, we acquired EUR 1.3 billion of revenues at a decent multiple of 6.4x presynergy, 4.8x post synergy, and I will come back on the synergy transformation. On the divestment side, we have only, I would say, divested within the period of time, '21-'24, only divested the Telecom business. I mean there's many reasons of why we have not been faster on the divestment, mainly linked to geopolitical situation in the world more recently. So we've divested the Telecom, EUR 400 million of revenue, and we did it at a quite decent multiple 10x. Of course, the focus is now on the 3 components that still need to be divested noncore. AmerCable, we just announced a few days ago, very recently, the signing with a potential buyer in Canada, Mattr, for $280 million enterprise value. So we are quite confident that this transaction should be closing within the next weeks. And then we have announced also the separation of -- and the forming and the separation of all the former Industry & Solution businesses under a name Lynxeo. So now it's a carve-out dedicated company ready for divestment. We've started divestment process. You're probably aware of that. And again, there's lot of appetite in those assets because those are performing good assets that we want to divest. And last but not least, auto electric, which will be treated as a separate entity for the divestment process. We are also starting the process -- restarting the process. We were, at 2022, very close from divesting that asset. But unfortunately, geopolitical reason prevented us from divesting the asset. We are now getting more momentum, and this asset will be also part, I would say, of the coming production for 2025. Very important because acquiring companies, integrating companies is one thing, but what is key is how much value you can extract from those entities when they join the group. And we have been quite successful, I would say, and we are very proud about that, quite successful in extracting synergies in our acquisition. A little bit early to talk about La Triveneta Cavi because, again, we just acquired the asset. But if we look at Centelsa we acquired 2 years ago and Reka a year ago, you see here that we have extracted twice the planned amount of synergies, twice faster. And I think this is critical for Nexans. We have -- with our SHIFT transformation model and our complexity reduction or pruning of customer, reducing the SKUs, we have a fantastic way of creating value when integrating a business. And we have been demonstrating that over the past asset, and it looks very promising for La Triveneta as well. Overall, we will, out of those 3 assets, generate EUR 50 million additional recurring EBITDA from those acquisitions. Let's talk now about the future and how financially Nexans will evolve -- with Nexans evolving following the presentation you've had earlier this morning through 2028. First of all, we'll talk about growth, which is new for us. We've always said and we always have those many questions with our analysts and investors about growth. When we report on a quarterly-only sales and organic growth, we always have this discussion about we were not looking for growth, we were looking for value. We were looking for cash. Obviously, now that we have cleaned the company, transformed the group, we are much better geared for growth. And this is what we will do in our Electrification businesses. So you see that for our 3 main pillars of Electrification, we will grow. Power and transmission, it will be a high single-digit growth. Question here is obviously not getting new orders. Of course, we will replace the [indiscernible] revenue, keep the backlog at a similar -- slightly higher but similar level as of today, replacing the revenue with new orders, roughly EUR 1.3 billion to EUR 1.7 billion per year of new order to replace the revenue, growth at a single digit. We will, therefore, execute, and this is the presentation of Pascal, all about execution, getting the margin up. I know there is a lot of expectation from you guys about how do we move from 10%, 11% to the 17% we're committing. We will get there, the journey of the 4 years, and we will be where we need to be. So execution of the backlog is the key of -- about power transmission. Power grid will be growing at single digit, mid-single digit. Here, we will basically capitalize on our room for capacity and extended capacity. I mean you've seen the presentation also of Vijay and Juliet -- Elyette, sorry. We will definitely work on those new value-added services and solutions. We will increase the revenue share of accessories with a much better mix than the typical medium voltage cable. Power connect, a little bit more, I would say, cautious here in terms of growth, below what the market is doing. We want to grow with value here. We want profitable growth, and it's true for all of the Electrification business, specifically true for usages where it's easier, I would say, to get high growth but you can very quickly damage your margin if you take any new customer or any new orders just to grow the top line. So we want to be diligent. We want to -- as explained earlier this morning, we want to strengthen ourselves in critical buildings, fire safety. We want to reinforce also in specialized projects, mainly data centers. And this is where we will grow, but we will grow profitably improving the mix of revenue from different sources to boost the EBITDA. Overall, Electrification business for Nexans will grow at 3% to 5% organic CAGR over the period. EBITDA. So here, we're talking -- I'm talking Electrification. And here, I'm talking same perimeter, no change of code, no M&A. We will add to the asset we have today EUR 350 million EBITDA versus a point of 2024. Again, this will be a mix of different things, similar to what we've done in the past equity story. I talked about the growth in the previous slide. There will be the mix. I explained also getting a better mix into our product, and the transformation will continue with SHIFT. We will accelerate SHIFT in some assets, and we will continue to grow the margin and EBITDA through the transformation platform of SHIFT. Altogether, again, same scope, EUR 350 million additional EBITDA during the 4 years. Over -- if you take that EBITDA growth for Electrification and we look at what it means, we take the commitment of growing the EBITDA of Nexans and reached onetime record for us, which is EUR 1.15 billion by 2028, which is roughly a 48% increase. If you take the midpoint of the guidance, EUR 750 million to EUR 800 million, it's a 48% increase growth of EBITDA over the next equity story. And you see, definitely, when you look at the history, it's far from anything that has been achieved in the company. How do we get there? I mean -- and how did we put together this EUR 1.15 billion of commitment for EBITDA by 2028? I talked about the first box, which is the organic growth and the EUR 350 million of additional EBITDA from Electrification. That's the pillar. The rest, the assumption we've taken is we rotate the asset, we divert the non-Electrification asset that I highlighted a couple of slides earlier, the 3 blocks, and we replace them with Electrification assets here. No specific magic. It's difficult to predict how much additional EBITDA we will get from there, so the assumption, it's like-for-like. I removed EUR 200 million of EBITDA. I add EUR 200 million of EBITDA. And therefore, obviously, if we do better, we have room here to exceed our target. We are quite confident in our ability to do that, first of all, because we've made significant progresses on the divestment as you've heard and read over the past press release. And also, we've cleaned the market about all of the targets available in the world that could fit -- that will fit our strategy, cable entities, accessories entities, tech entities, everything that will fit our new model. And we have screened EUR 20 billion of pipeline M&A revenue that we can work on as a basis to basically replace our EUR 200-and-something million EBITDA from non-Electrification. And we are quite active. And I have to say that as of today, and I'm sure it will be part of our question, that the market has been evolving quite in -- I would say, in a positive way in a buyer market. And we see much more opportunities for acquiring companies today. We are much more active on the M&A front than we used to be, we were 12 or 18 months ago. Return on capital employed. Here, I mean, obviously, 20% is a nice way. It's a nice -- it's an accretive return on capital employed for a growth company. We commit to not go below 20%, which doesn't mean that we will stay at 20%. Our aim is to grow return on capital employed, but due again to the type of asset we will acquire and the timing of when we will acquire those assets. It's difficult to put a too high of a cap in return on capital employed, and we commit not to go down below 20%. Cash flow -- CapEx, sorry, before cash flow CapEx. CapEx. We will remain at a similar level than the previous equity story in terms of CapEx, EUR 1.2 billion. We used have EUR 1.3 billion, '21-'24, similar. The split also between our CapEx, for maintenance CapEx to maintain our assets and our growth -- what we call our growth CapEx to increase our capacities, it remains also the same, 70%-30%, 30% maintenance CapEx, 70% growth CapEx. The difference with previous equity story is that we will be shifting a little bit from massively investing in power transmission, as we did over the past 5 years, to rebalance our investment and make them more aligned. And we're shifting from a 25% investment before in Electrification outside of power transmission, so power grid and power connect, to more balanced, 55% of our growth CapEx for power connect and power grid, more balanced, which doesn't mean we are not investing in power transmission. We are investing. And you see here the major CapEx of growth over the next 4 years. The first one is obviously the completion of our vessel, Electra. We still have -- we are halfway through the building of our third vessel, last generation. That will be ready by 2026. We still have EUR 150 million of a total of EUR 300 million of investment of spending to make -- to complete the vessel. But we also have other investments in high voltage. Total bulk of the investment in high voltage will be about EUR 310 million. So we cannot say that we are not investing in high voltage. We are continuing investing 40% of our growth CapEx will continue to be in power transmission. Two very important investment as well, one in power grid with a new plant we signed with the Moroccan government a few months ago. But we have -- we will build a new medium voltage grid plan to address the local market, booming local market in North Africa, EUR 80 million investment, will take until 2028 to build the plant. So we'll not have the return of EBITDA inside the equity story, but post equity story. And also, obviously, our major strategic move, which is increasing our recycling capacity, moving from 5% where we are today in recycling to our target of 25%. This will require a EUR 90 million investment in recycling that will be ready up and running by 2026. So again, the message here is strong CapEx oriented towards growth and a more balanced between power transmission, power connect and power grid versus the past, quite balanced. That goes with what Chris said. We like the balance between power transmission, big backlog, long-term view revenue and cash flow, but more risk of execution, more uncertainty versus the flexibility, the cash return that we have and the low -- very limited risk that we have on power connect and somehow in power grid. Free cash flow generation after CapEx. So I'm not talking -- I'm sure you will like it. I'm not talking about normalized anymore. I'm focusing now on free cash flow. So free cash flow, EUR 1.4 billion of free cash flow generation over the 4 years, so after the CapEx. With a tremendous improvement, as you see in terms of cash conversion, we will move from 25%. That basically is a cash conversion of 2024 EBITDA to free cash flow. We will move to above 45% by 2028. It will be gradual because we need to complete the CapEx I presented you on the previous slide, and you see that they will be completed during the next 3 years. But when those CapEx will be completed and the cash conversion will gradually improve year after year to reach, again, a ratio above 45% by 2028. Capital allocation priorities, M&A definitely. This is where we will put the proceeds of the divestment. This is where we put a big part of our cash flow generation, replace the EUR 200 million of noncore EBITDA for non-Electrification into new assets, of course, taking the commitment to protect our balance sheet, not exceed leverage above 1x net debt to EBITDA and that, of course, to continue to work on improving the rating of Nexans and shareholder return, continue to also increase with our cash flow, increasing our shareholder return, committing to a payout ratio above 30% with growing, obviously, recurring net income year after year during the equity story; some share buyback, mainly to avoid dilution the employees plan that we have every year. In terms of numbers of this capital allocation, 60% of our cash generation, the EUR 1.4 billion cash flow generation, will be allocated to growth, M&A again, and about 40% different level to shareholders, whether through the dividend or the share buyback I mentioned. I was telling you that I feel quite comfortable about the fact that we have the mean to succeed into our asset rotation and acquiring about EUR 1.5 billion to EUR 1.8 billion of new Electrification asset because we have a quite significant firepower for ahead of us -- with us. First of all, I'm not talking the cash on the balance sheet that you see is already quite good. If we take 60% of cash allocation, that's about EUR 800 million, if we say that we have a little bit flexibility in our balance sheet to get to 1x net debt to EBITDA, we are at 0.7x, we have a little bit of flexibility here, roughly EUR 200 million. And the proceeds for the divestment, talking about EUR 200 million of EBITDA to be divested, take a 5x multiple, that's EUR 1 billion. So all of it we have with a protected balance sheet, cap leverage and, I would say, not aggressive multiple for divestment, EUR 2 billion of cash ahead of us to execute our M&A strategy and replace those assets. M&A will be around 4 pillars, quite similar that we've had so far, whether we invest our existing geography and gain market share to become leader on the region, on the market. We grow into verticals, fire safety. We talked about fire safety, for instance. We grow in specific verticals. We get into new geographies where we are not present, and we'll try to buy one of the top leaders to make sure we have sufficient market share to basically be an actor on the region. And finally, but last but not least, very important, we're also planning and looking at asset that will bring us tech advantage, a technology hedge to execute our strategy. That will be the 4 pillar of our M&A investments. Almost done. Summary, I will not repeat. I think what is critical here for 2028: adjusted EBITDA, EUR 1.15 billion driven by Electrification; EUR 350 million, cash conversion, 45% for the group by 2028; and Electrification, again, an organic growth between 3% to 5%, I gave you the detail; and an incremental adjusted EBITDA versus '24 of EUR 350 million. That's a summary of the 2028 commitments we are taking. That being said, I give back the floor to Chris for the conclusion.

Thank you, J-C. Just 2 slides of wrap up, if you allow me. First, what you just heard from the team, from power transmission, is just leverage the early investment we have injected in the last 5 years. Execute high-quality backlog, we have already 82% of our revenue up to 2028. We have significant awards to be announced in coming weeks, just under finalization. That will be sure. We will be able to announce 100%, I will say, full revenue coverage in coming months for the next 4 years. Of course, exploit the extensive our assets with great customer partnership, and we will announce as well some partnership on that regards in coming months. Power grid, we have already injected a lot of investments in France. We are starting in Morocco, but we have done as well in Canada and in South America. And we need to make sure that these investments are fully leveraged to generate organic growth. But it's not -- organic growth will not be about cables, but it will be as well accessories, like Elyette explain. We need to double down on accessories, I will say, growth on as well investments. So we will have further announcements in that direction because we are convinced that the core elements for sustainable grid comes from connectors and accessories, not only cables. On Power connect -- is we are, I would say, talking with millions of electricians every day through our digital platform. And everything goes through our distributors partners, like Sonepar and Rexel or like Arcelor. But what they need? They need customers' experience. They need sustainable offer. And this is why the recycling is connecting the dots. They want green product for critical buildings for the big infrastructures. But they as well understand, if you take the example of data centers, that cable is not only basics. In the first age of data centers, there was full of PVC-type cable. PVC, the one that can burn in a minute. You will see in the breakout session that Jerome will make a live demonstration, live, I would say, but virtual demonstration. We are in a hotel in London, and we don't want to have the fire alarm starting. But he will show you the life of a PVC cable under fire versus our solutions, and you will understand the difference. And of course, we will bring more and more tech solutions. Guillaume, in the breakout session with Artefact, will show you how artificial intelligence will help us to grow faster, but to grow in a very profitable manner. And you will have, once again in breakout session, live demonstration about it. And to conclude with power transmissions to make the loop, Pascal will show you with Brian, a fantastic asset that we have in U.S. called Charleston, and you will be able to see a live tour of Charleston like we will have been in U.S. today for 15 to 20 minutes. You will see, it's a fantastic site. Let me conclude before getting your questions for these plenary sessions. First, on our commitment for sustainability, we have talked a lot about sustainability. But what is our own commitment? Our commitment is 46% Scope 1 and Scope 2 reduction by 2030. And we've been really advanced already on that perimeters in the last year. But I think what is important as well is not only the target is the how, too. And we have developed a trendsetter model to better manage the company in the long run, which called the E3. So each unit every year is qualified under E3 compatibility. They have to deliver their profitability and their growth. But they have to make sure that this economical, I will say, result is not detrimental to environment, neither to engagement. So this is why we are lifting up all the units in that direction, being good in economics, being good in environmental matters and as well being strong in engagement. This is a trendsetter we just signed different, I would say, partnership with schools, but with HEC. They are just built a complete business case on Nexans on these 3 model that will be available next year on the HEC platform, on our platform for the students. So we are very proud about it. That concludes our plenary session. You heard about our journey over the last 6 years, on the next 4 years to come. You've heard as well about our financial commitment on how we will make sure to deliver those financial commitments in coming years. We thank you for your attentions. We thank you for your trust because Nexans had have and done in the last 15 years, but we thank all our investors, all our customers for their trust in the last 6 years. Because without you, we're not being able to be standing out in front of you with those, I would say, fantastic result. I know it sounds a bit like a victory lap, but it's not over. The journey continues, and this is exactly what we presented to you. Thank you very much. So now we open for Q&A. We propose that we start Q&A with people, investors and analysts in the room. We'll come with a micro. So this is -- yes, yes. Micro #2.

Yes. Eric Lemarie from CIC. I've got 3 questions. The first one on CapEx. You -- it looks to me a very reasonable in term of CapEx for the next 4 years, and I was wondering whether it is the case for the other players in Europe as well. And I was wondering whether you see any risk of overcapacity in Europe for the high-voltage industry. The second question I already asked it actually. But -- and you already answered it recently, but I would like to have you -- maybe your fresh view on the risk related to a Trump administration in the U.S. for the offshoring sector in particular for your business. And the last question about metallurgy. You didn't mention metallurgy, and I was wondering if you can share with us your ambition for the metallurgy business in terms of revenue and margin for the next 4 years.

Okay. How do we share questions for you...

Well, you do everything and we listen.

No. I take the simple one, and you get the complex one. No. Let me answer the first questions regarding high voltage. I think we have not reached yet the part in where we believe that we have a risk of overcapacity in the coming years. The demand is still huge. This is why I think I wanted to align it with the slides on the history of electricity. It's a secular trend. Your question is fundamental, but I think that will be certainly a critical question that we need to ask post-2030. But at least, for the equity story that we are disclosing right now, you have no risk because you need the capacity to fulfill to, I would say, leverage the backlog on the orders that you already signed. So we don't need a risk of overcapacity. In medium voltage, neither because we need to renew the entire foundations of the electrical grid in Europe. But you're talking about Trump presidency, it's the same in U.S. It's the same in U.S. In U.S., they need to inject 20,000 miles of medium- and high-voltage cables into the grid for question of modernizations, and they cannot avoid it. And do we have a risk with -- under Trump presidency regarding offshore? I cannot comment something that I don't know. What I know is that when we injected $150 million of CapEx into our Charleston facility in order to make sure that this facility is able to do land high voltage for the 20,000 miles that I've just referred to, but as well to be -- to interconnect offshore wind farm, we did it in 2019 under Trump presidency. And what we see -- of course, he's not a big fan of offshore wind farm. But what we saw is that we were the only one bringing a local content. If you want to have an interconnected, I would say, cable subsea, which is designed by Americans and manufactured by Americans today, we are unique. So I think that will be positive. That will be negative. Of course, this unit is able to serve Europe in case of risk of demand or slowdown of demand in the U.S. Your second question was about recycling on metallurgy, maybe you want to say word on metallurgy.

Yes. Metallurgy, we've done the tough job, I would say, because I was part of the previous equity story when we reduced revenue from EUR 1.5 billion to below EUR 1 billion. And that was sometimes quite difficult to explain because it impacted obviously our organic growth and sometimes difficult to explain. That was part of our strategy. We are now at the level of revenue where we want to be and to stay, which is again below EUR 1 billion of revenue per year. And basically, that will remain across the equity story. The main purpose is -- was, I remind you, to reduce external sales to more focus on Nexans' needs, and we have achieved that. And we'll -- we have the right equilibrium, I would say, in terms of size right now.

And I missed one question, sorry.

And in terms of profitability, in terms -- for the metallurgy business...

If you go -- pricing has been one of the reasons we wanted to reduce the volume on that business was to a certain extent, but also because it was a little bit dilutive in terms of margin versus rest of the group. It continues to be not at the level, especially that now the margin of Nexans has nicely improved. So it remains dilutive, but it's running more today at 6%, 7% margin versus the 3% or 4% we had before. So -- but it will not improve much beyond that.

No, that's right because you need to combine it with the improvement of power connect because we've already interviewed more than 100 customers. In that sector, customers are willing to pay a 5% to 8% price premium if you are able to bring a cable, which is made of recycled copper, on recycled polymer. So this is our target. Next question. So we -- in micro #2.

Yes. Alasdair Leslie from Bernstein. I was wondering if you could talk a little bit more about these shifts towards kind of advanced offerings. Some really ambitious targets there, I think, for both connect and grid. I think if I'm not wrong, within grid, you're talking about a shift of 40%. 40% of revenue shift towards advanced offerings. I was just wondering if you could break that down a little bit, sort of organic and M&A. It doesn't seem like a huge amount of selectivity in there because I think you're targeting mid-single-digit growth versus the market 7, so a little bit under performance, so a little bit selectivity. I guess that just mechanically changes things. But also how much of that comes from organic growth in those advanced offerings? You said in the past, I think, 20% of that business was from accessories. So is that all advanced offerings? And then are we expecting to see more M&A fundamentally in grid as well going forward? And what's the field of opportunities there within that EUR 20 billion kind of pipeline?

Yes. I will answer from the last part of the question. Yes, of course, all the M&A that, I would say, J-C talk about, the EUR 20 billion pipeline, is specifically and strictly into power grid and to power connect. And it's roughly 50-50. In terms of type of companies, it's other cable manufacturers so that -- where we will be able, I will say, to increase our leadership in some given geographies, and as well, it's bringing different solutions like low-voltage or medium-voltage accessories. We will invest a lot on accessories because that's the leveraging point of the grid. But maybe Elyette, you can say a word about it.

Thank you, Chris. So just to complement, indeed, I will just confirm that majority of the investment, whether being CapEx or the acquisition for power grid, will focus on these advanced offers starting with accessories, especially based on the criticity of this component for the grid. But also because as you've seen, it is also bringing multiples that are much more accretive than we do have on basic offers. And second, as you saw on the services, by making the grid more resilient, we are actually also bringing a better profitability into our mix, thanks to recurring revenue. And this is linked to digital and artificial intelligence investments.

Yes. Maybe Jerome, you can talk a bit more about to -- stay with us, Elyette.

Yes.

On the monitoring system because we see that we have questions on the way, a lot of questions regarding what Olivier Pinto explained of what we are doing in monitoring system. What is our ambition?

Well, Olivier is our Director -- Innovation Director for the grid. And what you mentioned, the offer is based on hardware, which are sensor or connected connectors, the data platform that's allowed to have all those data in real-time and AI. And in the last 2 years, we have sold in the range of 10,000 connected connectors per year. They measure intensity, they measure tension, they measure temperature. And keep in mind that in the grid, the [indiscernible] occurs on those connectors, mostly, not on a cable. And we have installed more than 100. It was an R&D project, but 100 system with sensor with our partnership on cable and some of them on transformers. So part of this growing business will be basically with M&A on those monitoring systems.

Actually, the first one, which is kind of a 2-part question, is a follow-up on what we just discussed regarding the moving to advanced offerings, you didn't mention explicitly anything regarding like an R&D target. So just back to that question, is this mainly coming from the M&A side or there's an R&D increase inside your margins? And on the M&A part, I think you've mentioned 5x multiple basically for the divestments. This faster growth, more advanced areas, I suppose they will come at higher multiples, maybe if you want to comment about how you're thinking about that?

I'll take the first question. The first question is that when you look our R&D spend in the last 6 years, it was, I would say, 80% supporting raw material or material development, new polymers, new technology but really supporting cable industry. but as well, not only electrification because they were supporting as well the non-electrification business, different polymers that we need for aerospace business and rolling stock business. We have reinvested 100% of their spend on electrification only. And the rest, the 20% were 10% on smart components on digitalization. And we said, of course, we will keep increasing our R&D spend, but the spread will be different. It will be 50% to 60% through digitalization, Internet of Things, connectors -- this is where we will put and inject a lot of resources. We have -- already have hired a lot of new kind of profile that were not just not existing in Nexans in the last 5 years. So there will be a lot of organic R&D if it's part of your questions that we will, I will say, deploy and grow ourselves to avoid to make a big shift in terms of acquisition through tech M&A. There will be some M&A in the tech field, but we know that the level of multiples are a different space, different magnitude. So that will be M&A, but not, I would say, EUR 500 million type company at 20x multiple. We are injecting a lot in R&D right now with doubling down everything we do on digitalization and IoT.

The question -- your other question, Daniela, was regarding the divestment multiple versus acquisition multiple?

Yes. I think I kind of covered the answer. I have one more unrelated to this and focus back trying to tie the picture of on the transmission side. So you don't see overcapacity. The industry growth, I think, was 10% in one of the first slides. But on the other hand, you said the backlog you aim to keep it flat. Historically, you didn't mention it today, you had a 17% to 24% EBIT margin that you mentioned some time back in -- has your view on the attractiveness of the growth going forward then change and why do you not expect the backlog to grow?

It's a good question. The backlog will grow. But once again, you have 2 kind of elements of growth. You have the land part and you have the subsea part. So what we aim to have is we want to keep 97% of our backlog related only to subsea cables. So of course, if we grow it will grow, there is -- we are not rejecting orders, but we want to make sure that those orders are still good in terms of EBITDA generation and cash conversions. We are ready to invest more. We are ready to invest more if a customer come with long-term frame agreement and as well a support -- a very strong support on financing the CapEx if this happened in the coming years, we will do it. But maybe you can highlight more on J-C regarding the metrics.

Yes. On the backlog, Daniela, basically, the way we see it is that today, we have maximum capacity with the new CapEx we put in the business, which gives us roughly by the end of the equity story, close to EUR 2 billion of revenue for the business, roughly. Today, we have 2 things, we can do 2 things. We could get a bigger backlog that will extend visibility, we'll not change revenue because we are at maximum capacity. So we will just extend 12 months, 18 months, 2 years visibility by getting a bigger backlog. We prefer not to do that unless there is a very accretive orders we really want to take, but we want to differentiate ourselves versus competition and say we have earlier flexibility in our capacity than others, we have a bigger backlog or we could decide to invest, but you will only bring a higher backlog within 5 years, 4 years by the time we put the which is post basically almost 2030 or close to 2030. So today, we have chosen to rebalance our CapEx to keep the backlog at the level, replace it every year with the revenue recognized. If there is a fantastic orders coming up that will grow and extend visibility will take it, but it has to be very accretive to the margin backlog. And this is our strategy for the for the management of the business.

Do you still believe in the ['27].

Yes. So definitely '24, not saying '24. But definitely, we -- in the modeling of our equity story, we're moving to the low point of today, which is roughly 11% to 17% by 2027, '28. So that's part of the number you're seeing here.

I'm [indiscernible] from a primary research firm called Third Bridge. On the Power Transmission segment, given the project execution risks, in particular with the Great Sea interconnection projects, what are your expectations regarding return on capital employed over the next, let's say, 4 years? And how might that compare to competitors in the marketplace?

So, definitely return capital employed in the business today is low versus competition because obviously, the margins that we are extracting from the business today is at a low point, as I said, since last year and again this year. But it will improve. First of all, because we'll get more earnings. We get a bigger revenue, bigger operating margin, and we will not invest more in our capital employed in the business. So we will have a very nice improvement. I will not give the number per business, but we'll have a nice improvement, double-digit improvement of the retail of capital employed on the Power Transmission business over the next 4 years.

Jean-Francois speaking from ODDO BHF. Four questions from my side. Could you come back on the -- your expectation for the growth expected for your sales is a little bit lower than the growth expected for the market, this is the case for transmission, grid and connector. Why do you expect lower growth for the sales compared to the growth of the market expected? and the second question, could you give us some -- what do you expect for the margin by division -- so you expect, yes, more than EUR 1,100 million EBITDA. That means, I think 14%, 14% EBITDA margin if I will, calculated that. What do you expect for each division? Do you expect some strong growth for the transmission. And do you expect the same level between 14% to 15% or more than that for the grid and connector. So could you give us some more granularity about that? And the third question, running the recycling. You expect to increase the recycling components for the copper could explain how do you want to reach this such target? Do you want to invest in new plant, for example, you mentioned recently the cable loop. So could you give us some more details about that? And the last question, could you give us just an update on the Great Sea interconnector project.

Okay. So I will take the first question. The first question is why our growth ratio is a bit lower than the one that -- we mentioned in the first slide in terms of dynamic. It's a bit what mentioned, J-C during the presentation is you can grow much more. But you have to visualize the kind of sensitivity table, where you have the growth ratios and you have your EBITDA percentage. And we try to find the ultimate point where growth will not be dilutive on your EBITDA ratio on return on capital employed. And we believe that's between 3% to 5%. There was a model that showed that we can go above 5%, but it will have been dilutive in that case, potentially on the EBITDA ratios and the return on capital employed. So this is why of those metrics. Regarding the second question, J-C. .

So your question, Jean-Francois was regarding the growth of the EBITDA and the sales both, right, if I'm not mistaken. So I think you covered the sales part, but again, 4 -- 3% to 5% for electrification a big part of the growth will come from the backlog execution and the power transmission business, of course. The other business, I explained mid-single digits and low to mid-single digit. In terms of EBITDA, the big part of the growth of EBITDA, the EUR 350 million additional EBITDA will come from power transmission because again, as I explained -- answer the question of Daniela, we're moving to 11% to 17%, which is a 600 basis point improvement in the margin, driving about half of the -- half of the total EBITDA incremental EBITDA improvement. I would say the remaining part is pretty much split between the other 2 businesses. Overall, the CAGR of EBITDA is 11% -- almost 12% CAGR EBITDA for the electrification business over the equity story. So it's quite strong, I would say, growth in our performance in EBITDA. And I think I answer your question, right?

For recycling without going too much in technical details. The first topic on which we are currently working indeed is to increase what I would call the collection of good quality of scrap. So this is why we are entering in developing partnership with our customers. So the famous [indiscernible], what we have seen. So in other words, we are collecting the scrap from platform of our customer, Rexel [indiscernible] and others. And we are also now working with their own customers and we are collecting the scrap from the electricians, the installers in the different branches that we are coming, collecting and put back in the process. So here that I will say is the traditional part of recycling. And the key topic is to increase the percentage. We are able on traditional broadcasting unit to do between 5% and 10%. We know that we can do more, but we need to collect this good quality of scrap. And the second point, which is very important, which is going to make a clear innovation breakthrough is that we have this investment in loans that we have announced recently, EUR 90 million, we will be able to recycle 80,000 tons of copper, but I will say, lower quality copper at the entrance, but of course, with a specific process, the same quality of copper as a traditional system as we exit. And this will allow us to move from this 5% to 25% that we have announced.

And on your last question, Jan Francois regarding Great Sea connectors under the guidance of Pascal. We had achieved -- that we said stakeholders have achieved a major milestone in the last months with political agreements with all our revenue frameworks between Cyprus, Greece, European commissions. The next critical milestone is the monitoring survey of the seabed. We've done already a Phase I in last July. But our vessel have been surrounded between around -- by 7 navy missiles from Turkey. So we wanted to make sure that the Phase II that we're starting now will not create any kind of geopolitical issue between Europe and Turkey. That's not the case. They've signed an agreement in the last days. So we will be able, peacefully to launch this monitoring survey in coming weeks for a notice to proceed to be signed before the end of the year. So we receive as well additional cash down payments from the stakeholders to continue the production of the cable. So far, so good.

Lucas from Jefferies. So the first question on transmission. You talk about 80% kind of secure top line in the plan to 2028 and then that gets to 100% potentially before year end into early 2025. Does that obviously include Charleston and in the modeling of the 100% coverage, do you already use Charleston by the end of the period for European projects?

That's right. The -- maybe back related to the first question regarding what's happening in U.S. in the backlog that you have -- that we have today at EUR 6.2 billion, only 6% of this backlog is related to the U.S. offshore wind farm. And 83% of those projects are under production or close to the end of their production or starting their production. So we don't see any risk of those 6%. The questions will be on upcoming orders in the model when we will have reached 100% of the coverage of the revenue by 2028, we have not -- we are not counting on U.S. specific project. That's right.

That's right. We have basically revenues, margin and cash from U.S. offshore project stops in '25 with the completion of the project Chris mentioned. Everything after that is modeled through pipeline project that could be anywhere in the world and then [way enough]. And to prevent the question, it does not impact the margin of the project. The fact that it's, for instance, manufactured in the U.S. in Charleston and installed in Europe or somewhere else in the world because the marginal -- the cost the marginal difference in transportation cost is very minimal, and we have sufficient anywhere contingencies and provision in the contract value to cover any of that. So I think we are risk free when it comes to a worsening case of which we don't believe, but you never know [indiscernible] stopping any tendering U.S. offshore activity in the next 4 years in the U.S.

We have a lot of projects in U.S. on offshore wind farms that are very well advanced in different states. Of course, they can be stopped, but at least they are not part of the model. And If it comes, it will be a cherry on the cake because we are the only one to be able to provide the local content which is required in the Donald Trump presidency.

And sorry, I have 2 follow-ups. So the other one was on the higher growth segment within Connect, especially data centers. Can you explain a bit more maybe the complexity of this cable and also this end market, have you worked already with data center, how much of the business would that be? And also what's the route to market that generally will not go through distributors necessarily? And as well, are there any disadvantages of not having the fiber part, which some of your competitors do have?

Yes, I will take the growth part regarding the revenue recognition and I'll let you everything, which is technical for you. Let me start regarding data centers. As before, cables have not been considered by data center owners as the critical element. So they were buying cables through distributors, but all kind of cables could be fiber optic, could be PBC cables. Now in the large development that we've seen. They understand that it's a critical element because a PVC cable can burn. And in data centers, you cannot use water to stop a fire. So they understand why fire safety cable should be part of the critical elements. So now we are shifting, of course, our partners wants to pursue that business, but now we are more in direct contact with the Amazon, the Facebook of that world for data centers because of their, I would say, complexity of electrical architecture, maybe you can develop a bit more.

Exactly data center, as I mentioned, 10 years ago, they were very small there is -- we visit at a data center. There is the age 1, which are downtown. It's 5 megawatt. There is one Android 4G data center in London. There is 8,000 data center around the world. Then they move from 5 megawatts to 50 megawatts. But even at 50 megawatt, they were purchasing cable as commodities and distributors. And now moving for hundreds of megawatts, they are focusing on the right delivery at the right time. It's a question of Wits. They want to have full LFH cable because reliability is so important within the data center but they were also very kind of having low carbon offer. We mentioned recycling, what is the reason of recycling is that copper impact is decreased, thanks to recycling, could be minus 30% or minus 50% with these new equipments. So and in the data center world, they need that because basically, when you consume the electricity of modern [engine], you better have to explain what you did for the environment. So every single thing count, which is energy monitoring, 1% is what we find out in engineering, a saving of 1% of electricity, which is huge when you talk about 100 megawatts. So cable system is based on -- basically, it's the cable we used to know, but our service -- we know to manufacture, but it's engineering, low carbon offer and those -- all those new type of architecture. And they have a great interest. I mean any time we visit Amazon or data center in the U.S., they have a great interest to understand if they can use superconductive link because it's 0 loss. You can have 1 giga in like less than 1 kilometer with 0 loss.

Yes. And I think it's not only what is inside the data centers, but what will be outside because you have a lot of utilities TSO that say to data center owners that, guys, you cannot just connect to the grid like that. You will consume so much power that we will force you to build your own source of energy for your own supply. That means more solar farm or whatever's renewable energy that will support the data center development. Thank you, Jerome. I take a few questions on the line. Two, One for you, J-C, one for me. I'll take the first one. Do you have already candidates for M&A?

Yes.

That was my question. When -- your question is you will see you will love it. When companies take its target to discipline leverage with the net debt on adjusted EBITDA ratio of less than one and the commitment, maintaining a strong credit rating, does it imply specifically a goal to raise the company's external rating to investment grade from S&P?

Yes, Well.

You want to elaborate more?

Definitely. I mean one of the reasons I would like to keep the leverage down is, I think in today's environment, it's better protected arm and better capable of raising capital with you're investing grade. And I think the company is very close from getting there. I was expecting to get investment grade in February of '24, but it has been postponed with the acquisition of La Triveneta. S&P wanted to see how the integration of the business into Nexans would work. And I think we will be there. We will be ready at the beginning of '25, and we'll see how it moves. But definitely, that's the aim and the objective.

[indiscernible] to go back to the first question, I think J-C mentioned that our EUR 2 billion firepower for M&A. We know as well that's one of our top main competitors that we love and have announced a major acquisition in the recent in the recent months that put their level of that pretty high. So I think it's the time for Nexans to make a major move in coming years. And we believe that all the conditions of the market are excellent right now, potential risk authorization for some local, I would say, competitors, access to copper, which is a bit more complex than before for the small, medium-sized company, not for the big ones and on succession issue. So we believe that M&A, of course, will be a strong driver for us. I don't want to promise anything. The only thing that I want to promise is that our M&A blueprint is working perfectly. You've seen that we have been able to deliver or we will be able to deliver by 2025, more than EUR 50 million synergy post acquisition and with our SHIFT program, our purchasing power, this is where we start to be very good at. Other questions in the room?

So I want to follow up on how we should think about the margin for Power Grid. Because up to Q3, I think you were talking about the sensitivity table between organic growth and EBITDA margin. So now that we are targeting mid-single-digit organic growth for Power Grid, how should we think about the margin there?

They will continue to expand. I will not give you the exact -- because we don't disclose margin by business, but they will continue to expand. We'll continue on the journey. I mean, obviously, the next step will not be as significant as the one we just closed between '21 and '24, where we doubled the margin, and we're now going to double the margin again. But definitely, we are on an expansion front when it comes to margin growth in Power Grid.

Okay. So related to that, I noticed that you perched back the commissioning of your Moroccan investment to 2028. I think previously, it was 2027. Has there been delays there?

No, not specifically, but we have injected in parallel a short-term CapEx in France, where you've seen that more than EUR 15 million as we keep investing in France because we see a very, very strong demand in short terms. So it's just a question of capital, I would say, allocation on phasing, nothing special.

And I would just add something because I'm thinking about it on the margin. When I talk about the margin expansion of grid, it's with the existing perimeter. You know that definitely, we said in the presentation of Elyette and Vijay that we want to increase in accessories. So if we do M&A in accessories, it will improve the mix of the margin of grid business, and then we could see further expansion of margin, post M&A.

[indiscernible]. So my question is related to grid, basically medium voltage cables. So given that you are expecting growth in that area, are you seeing any orders -- so as far as I understand, your backlog right now is in transmission business, which is high voltage cables. But if the current is also growing, are you seeing orders there already? Or how is that -- can you give some light there?

It's not orders. It's frame agreements. So this is why that is not in the [backlog], maybe Elyette, you want to elaborate more about that question. And after we have another question.

Yes, when it comes to Power Grid, just taking the example of France that you mentioned, Chris, we have received a major firm agreement ordering longer term. So moving to 5 years type of agreement for everything that is linked to power grid low-voltage cables. And it is also thanks to our low carbon cables. So back to the topic of recycling, it's also linked our capacity to collect and recycle our aluminum scrap.

Not forgetting the demand.

Yes, the demand is high. It will continue. I mean you see now 7% CAGR. It will continue to raise. And of course, right now, we are just looking to be able to complete and comply with the expectation on medium voltage and low voltage cables for Grid.

And a follow-up question on this -- to think about sizing, right? In terms of volume, let's say, how to think about medium voltage cable order or framework agreement volumes. Let's say you have 5,000 kilometers order. What -- how would you translate in terms of amount in euros, such order or frame agreement?

As I said, it's not an easy conversion because not only the volume is increasing, but also the mix in the volume is different.

On the section.

Yes, exactly. Because in fact, why we talk about more advanced cables that those cables now have higher cross-section, higher lengths because we are serving much more powerful renewables on one hand and data centers on the other hand. So the mix is very different. And that's why you can not convert as is to the [2B] in terms of the Power Grid mix when it comes to volume and kilometers.

Other questions that we have here on the line there, [indiscernible].

We have a question in the room here.

M&A on accessories, monitoring and services. Do you expect to have opportunities at reasonable multiple or maybe will be more expensive than paying per pure cable manufacturers? So on accessory is monitoring and service, of course, the world of multiple is much higher. But we don't -- our aim is not only to grow through M&A, but to make our own organic investments to for that business.

Like I explained earlier in the previous answer, of course, this accessories business is already more valuable in terms of margin -- EBITDA margin than it is for cables. So we'll continue to increase that and improve that. So you heard now from my speech when it comes to both capacity and quality, this is where we are, digitalization and robotization in our plants and our people and expertise are key for the next step organically, and inorganically, but you can think that we have the same assets outside Nexans that we would be happy to grasp at the right place at the right time for the right multiple.

Thank you. Do we have last questions?

And it's follow-up to the grid revenue, the Advanced Solutions going to 40% by 2028. What's the margin differential on advanced solutions in aggregate versus basic solutions?

It's a good question. You will have answers in coming months, we will show you. But in average, from -- when you inject customer's experience, different customer's experience, you are able to look long-term firm agreement better than others which are because you have something more than just a price to offer. And that's -- my background is sales, and that's the core elements of -- you need to bring innovation, you need to show a greater customer experience for the customer to accept the premium on the price. And of course, we will elaborate much more in the coming -- in the context of the strategic -- or the equity story in the coming, I would say, months and years on how this life cycle solutions, but as well this tech solution will keep improving the EBITDA ratio of that business. But it's not only a question of ratio it's as well question of recurring revenue that we can have thanks to data and thanks to the model. This recurrent revenue that doesn't need any sales support and sales resources. This is the [indiscernible] but we don't want to show to give the entire recipe of our equity story. Other questions?

Just one follow-up. In terms of the framework agreements, are we -- should we expect lengthening of these agreements, like typically, they're around 3 years and customers were drawing them down faster. You're saying previously. As markets are getting tighter, will the duration of those expand? Or will they stay the same?

I think it's really specific to customers. We have customers that are willing to sign for 5 years. That's the case of our French customers like Andes. You have customers like Italian utilities like [indiscernible], I want to give a certain flexibility. So they are more in a renewal of a frame agreement of a 12 to 18 month pace, but that means as well increased volume. So I think there is not a one size fit all frame agreement type in the European market. Each utilities have its own specificities. In Greece is 3 years or is it a year. So that's -- I think that will not change.

Voila, that's the end of [presentation]. We thank for all the people connected. Now we will have a break, coffee break and after live experience for Charleston, live experience for artificial intelligence and fire proof.