Nexans S.A. ($NEX)

Welcome to the Nexans' Q1 2026 Financial Information. [Operator Instructions] Now I will hand the conference over to the speakers, Julien Hueber, CEO; and Vincent Piquet, CFO. Please go ahead.

Good morning, everyone, and thank you for joining us today for Nexans' First Quarter 2026 Financial Information Call. So as usual, a short disclaimer, noting that this presentation contains forward-looking statements and subject to the usual risks and uncertainties. So let me now walk through the highlights of our Q1 2026 performance. So we started 2026 with a solid performance in our electrification and core businesses, delivering a robust plus 4.9% organic growth in Q1, fully in line with our road map and supported by strong underlying demand. At group level, standard sales reached EUR 1.5 billion, corresponding to 0.1% organic growth as the good performance in electrification was offset by the contraction in our metallurgy activities as expected, following last year exceptional copper ordering level in the U.S. ahead of tariff implementation. At the same time, we are very pleased to announce a strategic acquisition in the U.S. low-voltage segment, Republic Wire. This is a sizable platform with around EUR 520 million of current sales, which will significantly strengthen and diversify our Power Connect activities and our overall electrical footprint in the Americas. This acquisition is in line with what I have mentioned a few times over the last 6 months. M&A in the U.S. is one of the key focus area for Nexans. And just to give you a number, in North America, our sales is moving from EUR 350 million in 2025 to now more than EUR 1 billion of sales, thanks to the acquisition in Electro, Canada we've done in last December and today, Republic Wire. Republic Wire transaction is expected to close early third quarter of 2026, subject to, of course, customary regulatory approval. Vincent will provide just after more information about the Republic Wire. Now moving to Slide 5. Turning now to the performance by segment. You can see all 3 Electrification segments delivered a solid start of the year, driven by organic growth of Power Transmission at plus 8.8%, Power Grid at a plus 5.7% organic growth and Power Connect at 2.5%, confirming the healthy underlying demand and the disciplined execution of our strategy across the Electrification perimeter. The other activities, mainly comprising of metallurgy has declined by 24% organically. This reflects last year's unusual pattern in copper orders in the U.S. with a strong pull forward ahead of tariff in H1, followed by a marked correction in H2, combined with our strategy to reduce external copper sales in favor to internal usage. As a result, organic growth in other activities expected to mechanically turn positive again in the second half of 2026. Let me now go segment by segment, starting with Power Transmission in Slide 6. So in the first quarter of 2026, standard sales reached EUR 342 million compared to EUR 308 million in Q1 last year, 2025, representing 11.1% growth, driven by 8.8% organic growth and a favorable foreign exchange fixed impact. This marks a return to more normalized growth after 2 years of exceptionally high performance, fully in line with our expectation. Once again, transmission is about long cycle of tenders and activities, and we should see another couple -- we should see another cycle of growth in the next couple of years considering the amount of potential projects to be launched. Energy sovereignty in the current geopolitical context becomes more and more mandatory, especially in Europe. Our Q1 performance reflects strong execution on our project and continued commercial expansion in smaller-sized projects. At the same time, we are implementing targeted cost actions on demonstrating operational agility. Looking ahead and as expected, it's important to bear in mind that our Q2 2026 organic growth will be a single-digit negative territories due to the expected project phasing effects. The trajectory should recover in positive territory in H2. Turning to the backlog. Our adjusted Power Transmission backlog stood at EUR 7.9 billion at March end 2026 compared to EUR 7.7 billion of December -- end of December 2025. It's a plus 2.6% increase over the quarter. Our backlog provides strong visibility through 2028, supported by high quality, a robust pipeline of projects, particularly in Europe driven by energy sovereignty needs and the upcoming commissioning of our first cable laying vessels, Nexans Electra expected to be operational by midyear 2026. Let's now move to Slide 7 to Power Grid. Standard sales in Power Grid reached EUR 322 million in Q1 2026 compared to EUR 313 million in Q1 2025. That's an increase of 2.9%, driven by a solid 5.7% organic growth and the foreign exchange accounted for minus 2.8%. This strong organic performance was particularly supported by call-offs under long-term framework agreements, as we explained last February and a very good momentum in data center activity. Renewable activities also remain well oriented. This high growth level was achieved despite the usual seasonality where Q1 is usually a low quarter in terms of organic growth. At the same time, our Accessories subsegment continued to deliver double-digit organic growth, illustrating sustained demand for high value-added solutions driven by ongoing grid modernization and smart grid requirements. Overall, Power Grid is benefiting from excellent market trends and a high level of visibility with a solid pipeline across utilities, data centers and grid accessories, fully aligned with our midterm growth ambitions. And we continue to see the increase in the average duration of our framework agreements translating the growing emergent needs from DSOs for the coming years. Let's now turn to Slide 8 regarding Power Connect. Standard sales in Power Connect reached EUR 647 million in Q1 2026 compared to EUR 603 million in Q1 2025. That represents 7.2% total growth, including an 8% contribution from acquisitions, 2.5% organic growth on the foreign exchange accounting for minus 3.2%. We continue to see a progressive recovery in Power Connect in some countries, although it remains uneven across geographies. The positive signals we observed in Q4 2025 have further materialized in Q1 in several European countries such as France, Spain and Italy, while Nordic countries remains more challenging as we have explained late in the last communication in February. In Asia Pacific, activities started to stabilize, supported by recent management change. The growth in the quarter was strongly supported by M&A, which is a key pillar of our strategy and the recent acquisition of Cables RCT in Spain and Electro Cables in Canada contributed significantly to growth and their integration is progressing very well, fully in line with our road map, particularly in strategic segments such as data center and fire safety. Overall, Power Connect shows solid market fundamentals, and we pursue the deployment of our high value-added solutions and focus on premium customer, which support selective and profitable growth and provide the group with agility and resilience. I will now hand over to Vincent for the highlights of our Q1 2026 and the presentation of Republic Wire.

Thank you, Julien. Good morning, everyone. So let's start with our standard sales bridge. We moved from EUR 1.478 million of standard sales in Q1 2025 to EUR 1.497 million in Q1 '26 on an increase of EUR 19 million, corresponding to 1.3% total growth. The first block on the graph is organic growth, which contributed to plus 0.1% at group level. This reflects a very solid 4.9% organic growth in our Electrification activities, fully in line with our road map, which was offset by a negative 24.1% organic decline in other activities, mainly linked to metallurgy, as explained previously by Julien. We had a minus 2% foreign exchange impact, primarily related to movements in the U.S. dollar and the Canadian dollar, which temporarily weighed on the reporting -- reported growth -- group growth, sorry. The remaining block is linked to scope contribution, adding plus 3.3%, driven by the consolidation of Electro Cables in Canada and Cables RCT in Spain with our Power Connect segment in which are both performing in line with our integration road map. Talking about acquisitions, let me now present the acquisition we have just announced in the U.S. I'm very pleased to present to you this acquisition, which is a very important step in Nexans' journey. We have signed an agreement to acquire 100% of Republic Wire, an established American manufacturer of low-voltage wire products headquartered in Cincinnati, Ohio that will form part of our Power Connect segment. Let me walk you through what we're acquiring, why it is a strong fit and what it means financially. Republic Wire was founded in 1982 and is a family-owned business that has built an excellent reputation as a high-quality actor in low-voltage wiring products. The company serves electrical wholesale distributors, utilities and municipalities across the United States and Canada. This is a platform with a nationwide commercial footprint. On the numbers, Republic Wire generated approximately EUR 520 million of current sales over 12 months to February 2026. This is a business of meaningful presence with a profitability profile that reflects the quality of the asset. From an industrial perspective, this is a fully invested platform. The company operates a single manufacturing facility and a newly completed warehouse and distributor center. Importantly, Republic Wire has recently completed a significant expansion program that will be fully online by the end of 2026, increasing its production capacity by approximately 30%, which will be reflected in its 2027 results. We're acquiring a platform that has already been prefunded for growth by the existing owners. The business is operated by more than 200 highly skilled employees and led by the founders, Ron and Jeremy Rosenbeck, who will remain in place post-closing. We've known Ron and Jeremy for many years, and there is a genuine cultural alignment between the 2 organizations. Turning to the financial terms of the transaction. We're acquiring 100% of Republic Wire for a total enterprise value of approximately EUR 680 million converted at the current dollar-euro exchange rate. There is also an earn-out designed to align interest of up to EUR 43 million potentially payable in 2028 based on performance through year-end 2027. We're referencing a 2027 multiple in order to reflect the earnings power of the recent capacity expansion. The entry multiple represents 7.6x 2027 estimated adjusted EBITDA after run rate synergies and before earnout. We believe 7.6x is a very attractive entry point for an asset of this quality in a market of this size. Before synergies, the multiple is 10.3x, which compares favorably to recent transactions in the market. And there's also the potential for the transaction structure to provide tax benefits for Nexans over time. The transaction will be financed through a combination of debt and existing cash on our balance sheet, consistent with our disciplined financial strategy. Pro forma net leverage is expected to rise to approximately 1.2x net debt to 2025 adjusted EBITDA and then delever to comfortably below 1x by the end of 2028. We expect our BB+ credit rating from S&P to be preserved, and we remain fully committed to maintaining a disciplined financial policy. We have identified approximately EUR 23 million of run rate synergies to be captured within 3 years. The phasing is front-loaded with approximately 50% being achieved in year 1. I will come back to these in the next slide. And finally, the transaction is expected to be immediately EPS accretive before synergies and before amortization of intangibles and implementation costs. Closing is expected early in the third quarter of 2026, subject to customary regulatory approvals, we're well prepared to hit the ground running on integration from day 1. Let me now present the strategic rationale and why we're confident in the synergies we see in this combination and strong value creation potential. The U.S. low-voltage market segment is estimated at approximately EUR 12 billion, driven by sustained demand across the residential, commercial and data center channels. This is one of the largest growth opportunities in low and medium voltage cable globally. Building a diversified presence in the United States has been a clear strategic priority for Nexans, and Republic Wire gives us exactly the platform to achieve that goal. The industrial rationale is built on 3 pillars. First, on platform, Republic Wire will allow Nexans to establish an expanded manufacturing and distribution platform within the U.S. geography, complementing the recent acquisition of Electro Cables in Canada. This creates a real platform for future organic and inorganic growth across the region. Second, on channel, we established immediate direct access to the residential and commercial channels through Republic's strong network of sales agents and distributors, complementing our existing global distributor relationships. There's also an opportunity to sell Nexans's broader product suite, including medium voltage in additional high-growth verticals, including data centers. And on product, Republic Wire brings a focused portfolio and -- sorry, an efficient and recently expanded manufacturing footprint and a highly skilled workforce. Nexans brings an extensive global product portfolio and advanced proprietary manufacturing technologies, so the value creation goes in both directions. On synergies, we've identified approximately EUR 23 million run rate synergies across 3 clearly identified streams focused on revenue growth and margin enhancement. First, on cross-selling, where we can offer Nexans's comprehensive product offering, particularly in medium voltage and grid solutions through both Republic Wire's distribution network and our own existing global distributor relationships. Second, on technology, where we expect to deploy our proprietary manufacturing IP inside Republic Wire's facilities to reduce material consumption and improve product performance. And third, industrial synergies through investments and vertical integration enabled by increased scale. And if you take a step back and look at our footprint, on Slide 14, you can see that the acquisition of Republic Wire diversifies and expands our footprint in North America. It is a particularly attractive geography given its midterm growth opportunities, partly driven by the momentum in data centers, which is significantly increasing power infrastructure needs across the U.S. We already have strong relationships with global distributors in the region, which we will use to commercialize this additional capacity. It will also enable us to further optimize our industrial footprint and mutualize our capabilities to compete more effectively for larger scale projects, including data centers. The U.S. is a healthy competitive landscape with meaningful profitability levels. In summary, we believe that this transaction offers a very strong strategic rationale. It will accelerate our growth prospects by expanding our access to a high-growth geography. It is financially compelling and value creating for Nexans shareholders. We have already devised our integration plan and the whole Nexans team is totally mobilized to make this deal a success and a foundation for further growth. With that, I now hand it over to Julien for the outlook.

Thank you, Vincent. So before we move to our 2026 guidance, and while remaining mindful of the current geopolitical tension on the international stage, we would like to remind you of the key levers we have in place to protect and improve our margin in this environment of inflation. So first, our main drivers of margin are pricing selectivity supported by strong underlying trends in electrification across our segments as well as sustained demand for high value-added solutions. And also, we have the second part, which is the operational excellence, meaning a margin over volume approach, strict pricing discipline on the deployment and the discipline on our shift methodology. Second, Nexans has developed increasing agility in our inflationary context to protect its margin, thanks to a strong and long-lasting relationship with our key customers, what we call platinum customers. Also, we have indexation clause embedded in our contracts to basically go for a pass-through. And third, we are managing with real-time pricing tools, the price in the market, all of which ensure that our pricing currently reflects our cost structures on our projects. And last but not least, on the supply side, let me take this opportunity to highlight that despite current geopolitical tension, we do not expect impact on aluminum sourcing. We source, as you know, primarily from a European rather than Middle East, in line with Nexans, we have a choice to secure low-carbon aluminum. And hence, we don't see any risk on the sourcing of aluminum. Let me now move to next slide, Slide 17, regarding the guidance. So for 2026, we reiterate our full year objectives with adjusted EBITDA between EUR 730 million to EUR 810 million and a free cash flow between EUR 210 million to EUR 310 million, unchanged versus what we've shared with you during the last full year 2025 results. As a reminder, this assumes a softer first half 2026 compared to second half 2026, and it does not assume execution of the Great Sea interconnection project in 2026 as we have already discussed. This guidance is also given on our current perimeter and does not yet include any contribution from Republic Wire acquisition, which is not closed at this stage. Finally, regarding the situation in the Middle East, we continue to monitor the situation closely. So overall, Nexans is in great shape with a robust business model evolving into attractive markets. Our business are performing well. The structural trends driving execution remains very strong and our midterm trajectory is unchanged. The acquisition of Republic Wire that we have announced today reinforce our positioning as a pure player of electrification. It significantly strengthened our geographic positioning in a highly dynamic market and expand our platform for profitable growth. All of these give us a high level of confidence in the future and in our ability to continue creating value for our stakeholders. With that, thank you all for your attention. And with Vincent, we will now be happy to take your questions.

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

I have a question on Republic Wire. So in the last 12 months to February this year, Republic did EUR 520 million in revenues. Can you give us a bit more indication how does that compare to revenues in recent years? And has there been any impact on their margins from copper tariffs, which seems like giving some advantage to companies that have vertical integration in U.S. rod mills, which is not the case for Republic Wire. So that's the first one.

Okay. So Republic Wire is growing year after year. They are very dynamic markets. They are expanding their capacity. They did investment into their plants since, I would say, strong investment in the plant in 2023. So the quality of assets, the quality of the machine are at a very good high level. And then it helped them to grow their sales in '23, '24 and of course, in 2025. And we'll continue to do so. As you have seen in the press release, we will have an opportunity to grow 30% capacity additional. So that will continue in the years to come. They manage very well their transition of the tariff because there has been no negative impact on their margin over the past year despite the tariff implementation.

And. My follow-up question is also on Republic Wire. So I think you mentioned there will be EUR 23 million cost to drive synergies. Again, I mean, this company employs only 200 -- around 200 employees and doesn't look like there is a big cost-out opportunity. So I'm wondering if you can provide where this EUR 23 million cost will be -- how this EUR 23 million cost will be used for driving synergies?

Yes. Yes, for sure, Akash. So it's -- in terms of synergies, it's more or less 50-50 top line on industrial efficiencies. There are some quick gains that we are -- we have identified the industrial parts namely the compounding aspect because they do not have any compounding lines internally. We do have. We have spare capacity in our operations in Canada. So that will be a very quick fix to improve the efficiency on that part. There is also some -- we have a program called Optimum where we are also optimizing costing -- redesign to cost of our product. We have identified that is an area of improvement. There are purchasing synergies as well. So all this will be driven on the, I would say, industrial aspect. And regarding the top line, you know that we have some excellent relationship with what we call platinum distributors worldwide. We are in close relationship with these platinum distributors. They are very well represented in the U.S. And today, they are not yet customers of Republic. So the aim is to quickly move to grow business with these distributors that are aiming for differentiation, aiming for innovations, and this is what we will scale to Republic. So this is one second also Republic, as you have seen, is very much focused to resi and industrial applications. We do have close relationship with the big 4 of data centers on combining Nexans Canadian and South America medium voltage plus low voltage from Republic, we will drive some data center business, which is a big focus for me and for the team to drive business in data centers using the U.S. footprint of Republic.

Maybe just a final one. I think you said in earlier sell-side call that this synergy takes into account the current tariff structure. And if we haven't had tariffs, then there could be upside. Can you quantify, let's say, if tomorrow tariffs goes away, then what sort of upside we might see on synergies?

It's a good point, Akash. So indeed, the reason why we also are very confident with Republic is that we know this company very well. We used to supply copper from our Montreal metallurgy business to Republic for many years. So we know them. We know the team, we know the quality of the team. As you know, since the tariff last August started, we stopped delivering to them for obvious reason. As soon as the tariff will be dropped, hopefully. Of course, here, we have no certainty. But as soon as it will drop, we will restart this. We have not quantified this yet. So I cannot give you a number yet, but for sure, it will increase the synergies for years to come as long as the tariff for copper will be removed.

The next question comes from Nabil Najeeb from Deutsche Bank.

I've got a couple. First, on transmission, do you have any update you can give us on the MI project pipeline and the progress being made on saturating MI capacity with short-term repair work and smaller projects? Secondly, on grid, could you maybe talk about what's been driving the performance here? Has activity in the data center and renewable space been higher than the previously expected? And if so, do you expect that to continue to be the case? And also, if you could also talk about the growth in the Accessories side, perhaps if you could further quantify the double-digit growth that you mentioned there and what the margins look like, that would be great.

Okay. So regarding MI, we have said that in Q1, we were finishing GSI last part of orders. So we have done that according to our plan. And we also said that just after we will produce and win some EMR, so repair orders, shorter orders, we also win these orders. So the line of MI is still producing today the small repair activities. And for the rest of MI, let's say, looking forward because I'm sure this is what you have also in mind, we are also in the tender of other MI projects. So far, I cannot say because we're in a tender phase. But this is ongoing as per our plan and as per what we have communicated last February. Regarding the grid, well, the grid, we are very confident about the growth, very resilient business. As you remember, we have win long-term frame agreements with our customers. On top of this, we also have in Q1, win some very large orders of data centers, by the way, in the U.S., but not only as well as in Europe. That is also reinforcing this growth looking forward. Some of these large orders will come in H2 because that's basically we are currently producing, delivering that in the second half of 2026. So complete in line with our expectations, I mean, very good resilient business in grid. On Accessories, while the Q1 was very dynamic, Accessories remains double digits. It's even higher in terms of double digit than what we have experienced in last year 2025. So here, what we always said regarding the accessories business is above 20% EBITDA margin. So extremely positive on the grid and accessories part.

The next question comes from Chris Leonard from UBS.

Maybe one for me on the Transmission business. I mean you spoke about being booked out into 2028. And obviously, we've also seen momentum recently on offshore wind. Could you maybe speak to the outlook for projects here for you guys and what you're seeing on pricing at the moment? And then a second question, you just mentioned there on Power Grid and in terms of winning new orders into data centers. Can you maybe comment on how big of an exposure North America is currently for the Power Grid business or in 2025 and where you see that going in terms of a geographic exposure by sort of 2028?

So Transmission, so regarding the pipeline of projects. So I think the things are in this large project, long cycle, they are not moving like one after the other, and we are on the same trend as what we explained last February. So we see -- we do see large projects to come mostly in terms of end of 2026, a big part will be in 2027, both in XLPE, so HVDC or HVAC as well as MI. So this is -- you see the geopolitical change with the Iran reinforce the willingness from the European countries to build autonomous energy sovereignty. So that reinforced the message of building their own power generation of wind offshore. So we do see that strengthening in the years to come. In terms of pipeline of projects, short term, it's more end of the year and mostly 2027 that we'll see this large project to come. Difficult to talk about the margin because we are, of course, preparing this tender, so we cannot communicate on the margin pricing whatsoever. But we do see there's a regain of, let's say, attractivity for the wind offshore. Power Grid, so we have Power Grid in the U.S. This is ramping up. We have established sales organizations in 2025, many focus in data centers, many focus in medium voltage. So this is growing very fast. Difficult to give you a number because this is still the early stage. But what I can tell you is that the order we are winning in data centers are let's say, large-scale orders. And we are rerouting our capacity in medium voltage we have in South America and Canada to the market in the U.S. because it's an attractive business for us.

And just to complement, that's where a deal like the Republic Wire makes a lot of sense and will increase our exposure since we'll be able to have channels to sell more grid products into the U.S.

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

Three questions from my side. First one for -- after the acquisition of Republic Wire, could you give us your exposition to the U.S. market on percentage of your sales? And for the North America, the same question, the percentage of your sales expected? The second question, in the press release for the Transmission business, you mentioned some cost-cutting measures to adapt to the structure. So could you give us some more color about what do you mean when you mentioned the cost cutting or cost reduction for sure? And the last question for the Connect business, you mentioned this growth -- organic growth for the first quarter. I would mention some growth for South Europe but more difficult for the Nordics. Could you give us the growth percentage for the South European country, France, Italy, Spain, et cetera, and the percentage of decrease for the Nordics area?

Okay. So I will start on your first question regarding the exposure of Nexans to North American market. So as I try to quickly explain at the beginning of this session, so we used to be -- we used to have EUR 350 million sales in North America, mainly focused in Canada. And since we acquired Electro last December and today, we are aiming to close Republic in some weeks, we will be above EUR 1 billion. So that represents more than 20% of Nexans exposure to North America. This does not exclude -- sorry, it does not include the metallurgy in Montreal and does not include the Charleston plant. It's pure Grid and Connect exposure. Regarding the Transmission, maybe Vincent?

Yes. So on cost cutting overall, I mean, we've launched a bunch of self-help measures since the beginning of the year. We know we have work to do on this. The end of the divestment programs allow us to basically refocus and decentralize a number of things. The big focus are the traditional SG&A focus and kind of the pure cost actions. So we've launched specific things on that aspect. And then we're also looking at a lot of purchasing where we're trying to drive more efficiency and better productivity in our purchasing activities. So these are the 2 biggest levers that we've been pushing and are starting to deliver with a specific program with very clear ambitions for this year and maintain the run rate after that. So that's the 2 big focus points.

And regarding your third question, Jean-Francois, so we do not share normally the sales per country. But what I can tell you in ballpark is that France, Italy and Spain, we are in the average of the Connect business. So we are -- we do see some slight recovery there, which basically confirm what we have seen in Q4 last year. Unfortunately, Nordics remains negative territories. We do not see any recovery of this market, specifically Sweden, which is still in a negative part. So that for us is that's the case today. No sign of recovery. We will see our plans or discussion with our customers tell us that maybe in H2. But so far in Q2, we don't see any big recovery.

The next question comes from Eric Lumari from CIC CIB.

I've got 3, if I may. The first one on the project in transmission you mentioned. So you mentioned some projects at the end of 2026. But regarding the project for which you are currently doing some quoting for the MI line related project. Could we expect some announcement before the end of 2026? I got a second question on the Republic deal. You mentioned some value creation on the slide but when should we expect that the return on this deal to be above the WACC of Nexans? When do you expect to create value with this deal? And the last question, still on this acquisition. Could you share maybe with us if there is any specific reason why the family decided to sell today to Nexans?

Okay. So I will start by the -- your first question on MI. So yes, we are in the tender phase. We follow this very closely, as you can imagine. And we do expect an answer by midyear. So it will not be -- of course, it will not be end of the year. Hopefully, it will be much earlier. So target today is to have an answer by midyear of the result of this tender. Regarding Republic, I will start the first -- your question again is the family, why we tend to sell the company. So the owner Ron is above 78 years old. And he will -- his willingness was to continue development of this business, joining force with a large group. That was basically his wish but he is ready to work with us the next 2 years up to end of 2027, at least. And we have also his son, which also has an active role that is also willing to continue to work. So it was really -- Ron was a person that wanted to basically manage the transition to a large group to continue the journey of Republic. That was his main motivation.

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

The next question comes from Alessandro Cecchini from Equita.

Firs one actually...

Cannot hear any question.

Alessandro, we can't hear you.

Can you hear me?

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

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

We still cannot hear anything.

The next question comes from Scott Humphreys from Berenberg.

Can you hear me okay?

Yes.

Perfect. So first one for me, just on CapEx actually. So at the November '24 Capital Markets Day, you guided to the sort of EUR 1.2 billion of cumulative CapEx, '25 to '28, so about EUR 300 million per year. When we think about the sort of 70% of that sort of EUR 200 million, which is going outside of -- and kind of where that's going outside of the medium voltage plant in Morocco and the recycling facility in France, should we expect that quite a significant chunk of this will now be redirected towards the U.S. following this acquisition? Or if you could help us understand the sort of the composition of that remaining CapEx, that would be helpful.

Yes, sure. So the overall plan of EUR 1.2 billion is correct, and we're on track for that. We expect our CapEx levels to -- once the wave of strategic investments is completed in transmission and the 2 projects you mentioned will decrease significantly in 2027. And then we're buying an asset in the U.S. that is significantly invested. Part of the reason we're using 2027 as a reference year for multiples and valuations is because that's when the fully grown, let's say, plant and warehouse will be completed and running. And so we don't expect to have to put a lot more CapEx on the site. We're acquiring something that is already finishing its wave of investment from a CapEx standpoint to expand its capacity.

Okay. That makes sense. And second question on transmission and the growth outlook for this year. I mean you talked about transmission returning to positive organic growth in the second half. I think the consensus that you've compiled coming into the quarter had about minus 2% organic growth in H2 and for the full year. You've talked a little bit about the MI production capacity and that topic. You've also got the new cable laying vessel coming online. How should we think about what a more normal level of growth in transmission looks like in the full year given these factors?

Yes. So you're right that compared to the explosive growth that the business experienced in the last 2 years, clearly, 2026 will be more normative and normal. We have a strong Q1. We expect H1 to be flattish single-digit type of growth. And then things will start to get a bit more positive in the second half but on a more run rate basis. The expansion of the boat capacity essentially the new boat coming in doesn't expand the capacity significantly because it's replacing a boat that we're currently leasing. So we're basically going to replace capacity that we rent for capacity that we own with improvements in terms of synergies and efficiency, but it won't be a massive expansion. And so for this year, really, it's about execution and driving the -- using the capacity we have and getting the business to deliver on the backlog we have.

And if I just ask a very quick follow-up on the cable laying vessel side. Is there anything -- any additional color you can give us? I know that previously, we've heard from yourself or peers that the market for chartering cable laying vessels from third parties, I think one of the data points was that you could pay about 3x as much to charter a vessel as it would cost to use your own. Has that sort of dynamic continued? Or what are you seeing in terms of the, I guess, the advantage that you're gaining from having that in-house installation capacity?

I will ask this question to be answered by Vincent because he's expert on this part.

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

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

And I have a question just generally on the low-voltage U.S. market. I guess in terms of -- you said on the call earlier this morning that you'd like more U.S. M&A. Just thinking of how fragmented the low-voltage market is? Are there a number of similar sized players that are potential M&A targets? Would you go smaller, more focused? Just a little bit of the lay of the land. And again, what kind of market share ambitions you have in the medium term in the U.S.

Okay. So basically, in the U.S. low voltage, you have mainly 2 players that I will not mention them but I'm sure you know them, that represent a big chunk of the business, maybe 2/3 of the business. Then you have a series of several companies the size of Republic that are usually family-owned businesses that we know quite well because, as I said this morning, we do supply them in copper from Montreal for many years. So we have a good connection with them. Our ambition is continue to grow in the U.S. low voltage and medium voltage, by the way, both activities in the U.S. We like this market. It's a dynamic promising markets, high-growth markets with very interesting verticals such as data centers and others. I will not give a specific numbers of share of wallet that we are aiming for because, of course, that depends on the conditions, depends on many elements. We want to be -- we want to be selective in the M&As. We want to make sure that what we pay makes a lot of sense. So -- but there are still a lot of opportunity in this business to grow our share of wallet in this market. We have been active in this in terms of pipeline. We are discussing with some of them, and that's an opportunity to grow, but we don't want to make stupid decision in terms of purchasing price.

Understood. That's very clear. And then in terms of, I guess, overall capacity in the market, this company, for example, is growing 30%. We're hearing of other capacity increases. Do you -- is your overall view that the U.S. market remains undersupplied that there's more capacity required for this market? Would you think of potentially increasing capacity within Republic to meet future demand? Or is this more inorganic expansion?

So in general, this -- the growth run rate of the cable low voltage and medium voltage in U.S. is growing fast, partly driven by data center but not only. So we do see that there is some -- and you're right, there is some ongoing capacity expansion with some of our colleagues. But for us, really is to remain very selective in the type of customers, selective in the product portfolio. This is -- I mean our strategy remains the same, even if it's in the U.S. We will be looking at both options, organic and inorganic in the U.S. Remember that we also have a strong positioning in Americas, South America and Canada. So it could be a combination of all this. Typically, the data center that we won recently, the large deal of data center is coming from a series of plants. So we'll do a combination of all this. We are not only in one direction. We'll be looking at all opportunities in front of us.

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

Okay. So thank you all for your questions and discussion today. So Q1 once again confirmed that Nexans fundamentals remain solid and resilient. And through our transformation into a pure play electrification, we have built a robust model of value creation, which position Nexans as a key enabler of energy transition and a critical contributor to Europe energy sovereignty. On the external growth, we are very happy we could announce the deal today with our Q1 publication, demonstrating once again our commitment to our strategy. I would like to thank you again for attending this call, and we'll hand over now to the operator for closing remarks.

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