Operator: Welcome to the Nexans' nine-month 2026 financial information call. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing #5 on their telephone keypad. Now I will hand the conference over to the speakers, Julien Hueber, CEO, and Vincent Piquet, CFO. Please go ahead.
Julien Hueber: Good morning, everyone, and thank you for joining us today for Nexans' nine-month 2026 financial information call. I am here today with Vincent Piquet, our CFO, and together we will take you through our performance for the Q3 on the first nine months of the year 2026. Today's update demonstrate that Nexans business model continue to deliver, supported by strong momentum across strategic verticals. The disciplined execution of our investment roadmap on the progressive integration of our recent acquisition keep us firmly on track to achieve our midterm objectives. As usual, I would like to draw your attention to our disclaimer. This presentation contains forward-looking statements which are subject to the usual risk and uncertainties. Let me now walk you through the highlights of our first nine months of 2026. So slide 4.
Julien Hueber: Nexans maintain a high growth momentum during the quarter with electrification remaining the core drivers of the group performance. The group standard sales reach EUR 4,947 million in the first nine months of 2026, which is up by +3.9% year-on-year organically. In Q3, standard sales reach EUR 1,698 million, which is up by +21.4%, including a strong organic growth of +9%. Even more linked to the contribution of our recently acquired companies of a +9.6%. Electrification remains the main growth engine, with organic growth over +5.3% over nine months and a +7.1% in Q3, supported by high demand in strategic verticals across PWR-Grid and PWR-Connect.
Julien Hueber: With a favorable seasonality on PWR-Grid with Q2 and Q3 typically being the strongest quarter on the successful execution of large-scale project while we continued to see the normalization of organic growth in PWR-Transmission as planned. The integration of Republic Wire is progressing in line with our roadmap and is already delivering good results. We are also launching a multi-year brownfield investment at the Republic Wire facility in the US for medium voltage accessories production to capture growing demand for data center on grid application, while at the same time expanding our accessories manufacturing capacity in Europe to expand our saturated production line. The Q3 was also marked by another step in strengthening our financial structure. In September, we successfully completed a EUR 500 million, five-year bond issuance. Vincent Piquet, in a moment, we will get back on this in the presentation. Moving to slide 5.
Julien Hueber: Before turning to the segment performance, I would like to highlight how our previously announced investments are progressively translating into additional industrial capacity and future value creation. First, in PWR-Transmission, we have openly, and we have inaugurated in October, our new 525 HVDC high-voltage tower in Charleroi, Belgium. This investment strengthen our capacity is the next generation of 525 kilovolt land cable with an entry into service expected next year in 2027. In PWR-Grid, our new medium voltage greenfield site in Safi, Morocco will reinforce our ability to support electrification across Africa with a progressive ramp-up expected through 2027 and 2028. Finally, in Lens, France, our strategic rod facility dedicated to recycled copper will provide an additional 80,000 tons of processing capacity per year, with a progressive ramp-up expected through 2027.
Julien Hueber: This investment provides a competitive advantage and enhance our ability to offer a low carbon product to customers increasingly focused on sustainability. Together, these projects illustrate our disciplined approach to scale value creation through industrial and operational excellence. Moving to slide 6. Alongside organic investments, M&A remains a key pillar of our strategy. Our focus is not simply on adding capacity in geographies, but on actively reallocating and mutualizing that capacity towards the most attractive strategic verticals. In North America, both Electro Cables and Republic Wire are accelerating output with a clear focus on attractive markets, including grid and data center verticals. Synergies are progressing in line with our roadmap on demonstrating the value of combining acquired assets with Nexans commercial reach and Israeli standards.
Julien Hueber: In Europe and Latin America, both Cables RCT and Centelsa, respectively, are allocating capacity to data center on critical building, while Reka Cables is supporting data center growth both in Finland and Norway. Our recent acquisition have significantly strengthened our exposure to strategy verticals. Given their attractive growth profile and high value-added positioning, these markets will be important drivers of both growth and margin expansion over the coming years. Looking ahead, we will continue to pursue M&A opportunities selectively within a disciplined strategic and financial framework. Let me now break down our performance between electrification and other activities. The group delivered strong growth in the Q3 of +21.4%, of which +9% organically, but also +9.6% linked to scope with integration of both Republic Wire in the US and Electro Cables in Canada.
Julien Hueber: The exceptional organic growth performance was driven mainly by both PWR-Grid and PWR-Connect, while PWR-Transmission continued the expected normalization of its top line. Other activities declined by -5.2% organically over 9 months as planned, and grew +24.7% in Q3 on a favorable comparison basis linked to a phasing of US copper orders ahead of tariffs in 2025. While the group organic growth was exceptionally high in Q3, it is also benefiting from seasonal effects. We therefore expect organic growth for the group in Q4 to be slightly lower than in Q3. Let us now move to our segments. Slide 8, starting with PWR-Transmission. As expected, the segment organic growth was in negative territory due to normalization after 2 consecutive years of high double-digit growth on an exceptionally high comparison basis.
Julien Hueber: This effect is expected to be stronger in Q4 2026 as PWR-Transmission grew at +40% organically in Q4 2025. Let me highlight that despite the normalization of top-line growth, we continue to improve our margin. We expect further margin improvement for full year 2026, keeping us on track to deliver 2028 guidance. Standard sales reached EUR 1,155 million in the first 9 months, which is up by +3.6% on a reported basis and down -1.4% organically, with a +5.1% positive foreign exchange effect related to the appreciation of the currency Norwegian krone. In Q3, standard sales were EUR 378 million, which is up by +2.9%, including earning growth at -4% against an exceptionally high comparison basis of a +33% in Q3 2025. Operationally, our priority in PWR-Transmission remains very clear. Discipline execution, and continued profitability improvement while securing the right project.
Julien Hueber: Our adjusted backlog stands at a solid EUR 7.8 billion and provides good visibility through the end of 2028. Looking ahead, we remain confident in the prospect of PWR-Transmission, supported by a structurally growing market and a strong pipeline of opportunities. Slide 9. Moving to PWR-Grid. PWR-Grid delivered a high organic growth above our midterm guidelines. Standard sales reached EUR 1,066 million in the first 9 months, which is up by 7.5%, including 8.1% organically. In Q3, standard sales reached EUR 364 million, up by 15.8%, mainly through organic growth at +14.8%. Performance was supported by seasonality strong activity in Europe in Q2 and Q3, the ramp-up of additional production capacity, and continued operation efficiencies initiatives.
Julien Hueber: If we look at our different region, we saw strong demand from framework agreement with utilities on data centers in North America, as well as a large-scale solar project in South America and Middle East and Africa. Once again, accessories maintain a strong momentum fueled by customer demand for advanced offer. This performance is consistent with the structural strength of the market. Grid need to be modernized, reinforced, and expanded while available industry capacity remain constrained worldwide. Nexans also continued to benefit from its strong position in medium voltage cable on the high-value service accessories. Commenting on this strong performance, this is the right opportunity for me to give you color on our new capacity expansion ambitions in medium voltage accessories in the US and in Europe. Moving to slide 10.
Julien Hueber: As you know, part of our 2028 guidance will be achieved with the increase of our mix to nearly 40% of advanced offer in PWR-Grid, which include accessories. So in order to achieve these targets, we are increasing our exposure to the highly profitable and dynamic medium voltage accessory market with the objective of raising production capacity by around 39%, +39% between 2026 to 2028. Over the next few years, we plan to invest approximately EUR 62 million to the accessories capacity, both in US and Europe. In the US, we plan to invest in a brownfield expansion at the Republic Wire facility. This will build a more resilient local supply chain, reduce the lead time to our customer by up to 60%, and position us to capture growing demand from data center and grid application.
Julien Hueber: Let me highlight that lead times are our customer top priority today, including in this business of accessories. The expansion in the US will be deployed progressively from 2027 to 2028. In parallel, we are also investing in Europe from 2026 to 2028 to expand the current saturated manufacturing capacity in order to scale up our advanced offers. Now, moving to slide 11. Let us finish the business review with PWR-Connect. PWR-Connect delivered an exceptionally high quarter with a growth supported by both strong organic momentum and the contribution from recent acquisition. Standard sales reached EUR 2,125 million over the nine months, which is up by 21.9%, including an 8.3% organic growth on a +14.5% scope effect. In Q3, standard sales were EUR 750 million, up by 36%, with a 10.5% organic growth on a 24.4% scope contribution from Republic Wire.
Julien Hueber: Organic growth was driven by positive dynamics of key geographies. First, Europe showed sign of recovery in several countries, but still with an effect on the profitable mix. North America benefit notably from data center demands. We will come back, I am sure, on that in the discussion. South America was supported by solar activities on the higher residential demands. Middle East and Africa remain a strong momentum. The integration of Republic Wire is progressing in line with our roadmap. We have seen synergies starting to materialize and cross-selling underway. Our priority remains to progressively mutualize our industrial footprints, accelerate synergies, and allocate capacity toward the most value-attractive opportunities. So with that, I will now hand over to Vincent, who will take you through the key financial developments.
Vincent Piquet: Thank you, Julien. Good morning, everyone. On slide 13, let me start with the standard sales bridge from EUR 4,492 million in the first nine months of 2025 to EUR 4,947 million in 2026, representing a total growth of 10.1%. Organic growth contributed 3.9%, reflecting 5.3% growth in electrification, partly offset by a -5.2% decline in other activities, mainly linked to metallurgy. Scope added 5.6% with the Republic Wire, Electro Cables, and Cables RCT acquisitions, including about EUR 140 million of standard sales for Republic Wire on the period. Foreign exchange contributed for a further 0.6%, mainly reflecting a positive effect from the Norwegian krone, partly offset by the US and Canadian dollars. Let me talk about the Republic Wire integration. The integration of Republic Wire is progressing in line with our roadmap.
Vincent Piquet: The planned 30% capacity extension is being delivered on schedule, and operations now running 7 days a week, and 2 new production lines installed as planned. Since 1 July, Republic Wire's product portfolio has been integrated into Nexans's data center offering. Procurement synergies are being delivered in line with plan, most notably through internalized sourcing of compounds. In parallel, further synergies are being captured through product design optimization. We are also seeing channel-to-market benefits with Republic Wire's established network of more than 250 sales agents across the US now selling the Nexans portfolio. Nexans also gave Republic access to its established relationships with its key distributors. Overall progress to date reinforces our confidence in the integration and in Republic Wire's ability to create long-term value for the group. On slide 15, turning now to an important financial milestone for the group.
Vincent Piquet: In September, we successfully completed a EUR 500 million senior unsecured bond issuance with a five-year maturity to September 2031 and a fixed annual coupon of 4.25%. The proceeds were used to refinance the bridge term loan put in place for the acquisition of Republic Wire. Strong investor demand confirms market confidence in Nexans credit quality. S&P also confirmed Nexans BB+ rating with a stable outlook. This attractive fixed-rate funding preserves our financial flexibility and capacity to continue investing in organic growth and targeted M&A with a disciplined leverage framework. With that, I will hand the call back to Julien.
Julien Hueber: Thank you, Vincent. Let me take you through now our 2026 outlook. On slide 17, we reiterate our full year 2026 guidance, including an adjusted EBITDA expected between EUR 770 million and EUR 840 million, as well as a free cash flow between EUR 235 million to EUR 325 million. As previously communicated, these guidance do not assume execution of the Great Sea Interconnector project in 2026, but include the load of MI line at the end of 2026. They also include the contribution of Republic Wire from 1 June 2026 and exclude any contribution from future acquisition. Overall, execution is our strategy, which is on track. This strategy is on track while we navigate in a highly unpredictable geopolitical environments. As we enter our final quarter of the year, we remain confident in the underlying strength of our businesses and in our ability to deliver our midterm outlook.
Julien Hueber: Our priority remains to translate positive market trends into sustainable, profitable growth through consistent execution and financial discipline while continuing to create the long-term value for our shareholder. With that, thank you all for your attention, and Vincent and I will now be happy to take your questions.
Operator: If you wish to ask a question, please dial #5 on your telephone keypad. If you wish to withdraw your question, please dial #6. The next question comes from Akash Gupta from J.P. Morgan. Please go ahead.
Akash Gupta: Yes. Hi. Good morning, Julien and Vincent. I got three questions, if I may. The first one is on this new MI order. I think you still have in your guidance that you might get a bit in end of Q4, but we are now in end of October. So maybe if you can provide an update on what's the likelihood of that happening and also if there will be any risk to 2027, if there will be further delay. The second one is on grid business. So you announced this new investment of EUR 62 million today, which looks on top of the plan that was announced at the Capital Markets Day in 2024. So shall we expect some sort of upside on grid numbers compared to your original plan presented at Capital Markets Day for 2028? Last question that I have is more on the mix side.
Akash Gupta: You are not giving margins for Q3, but when we look at your connect revenues and grid revenues, is there anything that we need to be aware of when we look at H2 margins? Thank you.
Julien Hueber: Thank you, Akash. I will start by your first question on the MI. Indeed, so late July, we have announced the preferred bidder for the MI project. As you know, this is a Republic tender, and we have to respect, of course, the administrative process from our customers. We are very confident that this award will be announced, I would say, soon. We are very confident that we will start to manufacture this project by end of 2026. So, no change for us. We have to respect the need for test. It takes the time that it needs to take, but we are confident that it will occur in the coming period, and we will start production by 2026. There will be no change as what we have said late July regarding 2027. For your second question for the grid accessories.
Julien Hueber: First of all, I think it is very good news for Nexans because we do have a great business in accessories, as you know, for medium voltage. We are extremely happy to see the growth. Remember, it was a double-digit growth the last three years at a high margin level. That is why we decided to add capacity. We have seen some very strong sales also recently from our teams of accessories in the US. That is why we decided to increase capacity and use the platform of Republic for this activities or accessories. That will be part of the envelope of the overall CapEx that we have announced for the full Capital Markets Day numbers until 2028. We will see that this business will be growing because it is extremely lucrative business. Regarding your third question, maybe you want to talk about it?
Vincent Piquet: Sure. Hi, Akash. On the mix side on your question in the H2 margin, we remain aligned with what we have communicated before. We are pushing hard to make the grid business above 15%, and that is what we are working towards. On Connect, we have seen strong growth, as you saw in the numbers. The mix of where this growth is happening is still not perfect, I would say, and so we continue to work to drive the mix above 12%. That is where we want to get that business, and so that is why we are not changing our guideline and the margins in H2 should be on track with what we have announced before.
Julien Hueber: Thank you.
Operator: The next question comes from Nabil Najeeb from Deutsche Bank. Please go ahead.
Nabil Najeeb: Hi. Good morning. Thanks for taking my question. Just on Q4 growth for PWR-Grid and PWR-Connect, how should we think about growth in Q4? In PWR-Grid, you have obviously got a very strong acceleration in Q3, and I get that Q4 is seasonally weaker, but you should still be able to capture some growth from that new capacity ramp up, correct? Also in PWR-Connect, the comps do get tougher, but you have some underlying improvement in several markets, and if you can just get some color around which markets have improved, that would be great as well.
Julien Hueber: Okay. Both PWR-Grid and PWR-Connect, we of course, still expect some organic growth in Q4. As we have said in this presentation, the Q3 was exceptionally high due to seasonality, due to large projects in data center, but also in solar activity that we had in this period, Q3. But we still do expect some growth in the Q4 coming from capacity, coming from our positioning now in the US, that will trigger also this organic growth. For PWR-Connect, in term of dynamics, we start really to take the benefit of North America, Republic Wire on Eco in this part of the world. That is driving both growth on the improve of margin. You know that we have said from day 1 that Republic on Eco will be accretive to our margin level. So we will see that also happening in Q4.
Nabil Najeeb: Got it. Secondly, on PWR-Grid, I get that you are expanding capacity, and you said you are increasing European capacity by about 40% by 2028. Just trying to figure out the cadence there. How much incremental capacity will you see in H2 and going into 2027? How should we think about the trajectory there?
Julien Hueber: The organic growth we are doing in PWR-Grid is a mix of different things. The first one is indeed coming from additional capacity. But it is not only this. The second element, if you remember, I have explained during the year a few times that we are mutualizing our capacity worldwide. So we are now using any capacity we do have in some regions to fulfill markets at the regional level. So it is a combination of mutualizing our footprint plus additional capacity. That is why it is difficult to explain specifically what comes from only capacity increase. But that will continue to happen in the next few years because, as you say, and as you have noticed, we are on the way to increase capacity up to 40% from 2025 to 2028.
Nabil Najeeb: All right. Got it. Thanks, Julien.
Julien Hueber: Thank you.
Operator: The next question comes from Lucas Ferhani from Jefferies. Please go ahead.
Lucas Ferhani: Hello. Good morning. Thanks for taking my questions. It was just on North America and specifically on Republic Wire. Just I think when you did the deal, you talked about 30% increase in capacity that was already kind of funded and was going to happen. Is that already materializing there? And does that 30% include kind of new lines and also moving to more shifts? Thank you.
Julien Hueber: You are right. This is what we said at the moment of the acquisition of Republic, and this is currently happening. The new line has been installed, and now we are ramping up this additional capacity. It takes a few months, but we are on the good way. In fact, we are even in advance compared to what we thought in the initial plan. The ramp-up is happening currently. You see some of it in the numbers that we published today. At the same time, we also increase the number of production days this business used to run on a five-day basis. We are now moving to possibly to six days and seven days manufacturing. We really want to maximize the output of this new acquisition.
Lucas Ferhani: Perfect. Thank you. When we think about the margin at Republic Wire, obviously you have some best in class like Canada, for example, or the Nordics on a certain level and then the group level. Can you tell us roughly where is it closer to kind of group or is it closer to these kind of best in class? How much kind of improvement could you see on the margin at Republic Wire?
Julien Hueber: Republic Wire is accretive to our margin from day one. It is not yet at the level of Canada, but it is already a very good level compared to the average of Nexans, so it is really accretive. We do not precise the margin per country, and you can imagine why, but this is a positive element. With the additional capacity that we are opening currently, that will also drive the margin up. So very strong positive element on the value creation in Republic. Let us say it is only three to four months that we did the acquisition, so we are extremely positive about this business on this market of the US. Overall PWR-Connect, as you know, it is a very contrasted segment. Nordics are indeed best in class in terms of margin such as Canada.
Julien Hueber: You know that I have mentioned several times that this year the Nordics are, I would say volume-wise, not at the level that we expect. The local economy is not that strong. What we see in Q3, that two country out of the three start to really pick up. It is basically Norway and Finland, mainly due, partly due to data center activities. There is plenty of activities of data center in Finland currently, and we are well-positioned thanks to the acquisition we did in 2023. Sweden remains still not there, and that was our biggest business term of size. So it is still flattish, has not yet restarted. That is why I am saying that is a contrasted market segment.
Lucas Ferhani: Perfect. Thank you.
Julien Hueber: Thank you.
Lucas Ferhani: Thank you.
Operator: The next question comes from Scott Humphreys from Berenberg. Please go ahead.
Scott Humphreys: Hi, thanks for taking the question. I have a couple, if I may, and I will ask them one at a time. Just on data centers in North America. You have talked about how you saw remarkable performance in Connect in North America, and that is supported by hyperscale data centers. Could you help us understand to what extent this is associated with the legacy Nexans business in Canada versus the Republic Wire business in the US? It feels like this would be more the former, given this is only the first full quarter since you completed the acquisition, but I would be interested to know if you are seeing some pretty immediate benefits in delivering for data center projects in the US. Thanks. That is the first one.
Julien Hueber: Okay. First, just a reminder, data center for Nexans today is only 5% of our total sales. 95% of our sales are not data center oriented. We are very diverse, solar, critical building and so on. That is also true still today in North America. We are growing data center. This is a strong growth, but it is still representing 5% of our total sales. Specifically now in North America, the fundamental of Republic, you remember, they were not exposed to data center, so we are on the way to push them to open their portfolio of product towards data center, and that is just starting. They are just at the early beginning. That means that the rest of the business, which are construction commercials, is also dynamic. There is the level of service of Republic, the reputation, the strength of the agent network.
Julien Hueber: As we said, 250 agents across, let us say the attractive states in the US drives also the good results of Republic, which are not only related to data center. Data center is coming for Republic. We are enlarging the portfolio. We are connecting them with our traditional platinum customers, but that is only the beginning. But we are extremely enthusiastic about what it will generate for years to come, specifically from 2027.
Scott Humphreys: Great. Thank you. Then just in terms of customer behavior in Grid and Connect. You mentioned at H1 that you saw a strong backlog for Grid and Connect in the second half, and we have obviously seen that come through into the sales numbers here. Some of your peers have talked about some data center customers starting to sign long-term supply agreements, in the low-voltage space as well. Could you describe what you are seeing in terms of changing customer behavior in Grid and Connect outside of the sort of traditional utilities business? Does there begin to be a trade-off between visibility and margins here, or are you still very much focused on profitability over just growth at all costs?
Julien Hueber: Okay. Our strategy remains the same. It is a selectivity of customers on product. It is about profitable growth only, so we are not aiming to go volume for a low margin. We are extremely disciplined on price. That is a big priority for us. You are right. We see on the discussion we are having with customer, both PWR-Grid and PWR-Connect, is about long-term, it is about partnership, it is about allocating capacity to specific segments, specific verticals. So we have this type of discussion with some of our key customers, key partners, supporting them in their growth. So that is coming. It is getting very, let us say, concrete in the US thanks to the structural under capacity for some segment of some portfolio of products.
Julien Hueber: So that is really mature. But we are also engaging our customer in the other part of the world to have a similar approach.
Julien Hueber: I believe that when we will be looking from, let us say, in one year, two years from now, we will allocate possibly more capacity to long-term customers, even in PWR-Connect business, which used to be more a short cycle market. This market is also moving. So that is the direction, and that will not be at the cost of the margin. Margin will remain, for us, a critical driver of performance.
Scott Humphreys: Perfect. Really helpful. Thank you.
Operator: The next question comes from Sean McLoughlin from HSBC. Please go ahead.
Sean McLoughlin: Thank you. Good morning. My first question is just around the unchanged EBITDA range, which obviously implies a pretty broad range of outcomes for the H2. Just thinking about your confidence around the midpoint, the upper half of that range. You talked about a measured approach in the release around Q4. I am just wondering, how much, let us say, this MI line is weighing. Is there anything else in the mix that you want to flag, particularly as we look into Q4 when we think about margins later in the year? Thank you.
Julien Hueber: I will start, and maybe Vincent Piquet will continue. Well, first of all, as you know, recently, just 3 months ago, we have increased our guidance for the year 2026. That was late of July, so it was not that long ago. We knew at that time already how Q3 was going to look like and what the numbers you see today. Historically, Q3 is always a seasonal high level of demand because specifically in some market like PWR-Grid, this is a time where it is easier to bury cable under the ground. So that drives higher activities in the PWR-Grid aspect specifically. We knew also that in Q3, we were going to deliver the large project, both solar, but as well hyperscale. If you remember, I mentioned in late Q1 that we won an hyperscale large project in the US.
Julien Hueber: It has been delivered, of course, on time in Q3. I am also careful on the geopolitical uncertainties that we are facing. The world is uncertain. The oil price is still moving up on source. So I am taking all these elements into account. That is why we consider that this guidance is the right guidance to have. But we are working very hard to be better than the midpoint. That is our target. This is our engagement. But this is where we are today. Maybe, Vincent Piquet, you want to add a few points?
Vincent Piquet: No, not much to add. I think you have summarized it. Uncertain times, a lot of volatility. We talked about the impact of tariffs in our initial guidance at the beginning of the year, and as we have seen this summer, it has been volatile. So we have to take into account the current geopolitical volatility and the impact it could have on our business, which is why we decided not to change the guidance. But as Julien Hueber said, we are confident the teams are working, and the goal for us is to get to better than midpoint. That is the ambition. That is what we are driving to.
Julien Hueber: And specifically on your question on getting the MI line. That does not trigger any change. We are still confident to have this project to start by end of the year. We have said it will be by end of the year. We still consider that we are on the plan that we thought initially.
Sean McLoughlin: That is helpful. Thank you. If I can just maybe follow on the point about the MI line. Should we also assume that this project covers you for MI capacity for 2027 as well?
Vincent Piquet: The project will start at the end of the year and will fill the MI capacity completely next year and until 2028.
Sean McLoughlin: That is helpful. Thank you.
Vincent Piquet: Midyear 2028. Yep.
Julien Hueber: Thank you, Sean.
Operator: The next question comes from Jean-François Granjon from Oddo BHF. Please go ahead.
Jean-François Granjon: Yes. Thank you. Good morning. Two questions from my side. Could you just come back on the accessories business, you mentioned strong growth. Could you more quantify that? What is the growth for the accessories business currently for the 9 months? Do you expect also double digit growth for the accessories for the coming years? Could you give us the amount of the sales made with the accessories business? The second question concerns more 2028. I do not ask you for sure current guidance for next year, but could you give us some trend expected for the three main business for 2027? Thank you.
Julien Hueber: Okay, Jean-François. So accessories. What I can tell you is that it is 20% of our grid business, so that you should be able to reconcile the numbers. 20% plus, because this is growing faster than the cable part. It is a double-digit growth year-on-year over last 3 years. On this segment, we do see the trend in very regular manners, and the reason why we have decided to really invest in this business is because we see more opportunities. It is a technical product. You know that our customer, when they invest massively into renew a grid, electrical grid, the part of accessories is a small part in the cost. But at the same time, even though it is a small part of the total cost of the grid, it is the most, let us say, fragile part. This is the part which usually where you start to have breakdowns.
Julien Hueber: So they do not want to purchase low-quality products. So they go for the high premium product, and this exactly the segment where Nexans is. High technology, high reputations, high quality. And for me, it is important that this additional capacity will give me the opportunity to also offer the high service in term of lead time addition. Because today, the market overall is saturated as well. You have long lead time, so important to be present, important to really position ourself in the best in class in the accessories world. So we will continue.
Jean-François Granjon: Okay.
Julien Hueber: On the fact that we take the benefit of Republic Wire. Republic Wire, we said it will be a platform for growth in the US, and that is the first example. We will come back with other projects we have in our ambitions. But the first example of a platform is using this platform, their network of agents to grow this accessories business in the US. There is plenty of opportunities there.
Vincent Piquet: Maybe I will take the second question. On the 2027 trends for growth, we are not going to communicate, obviously, detailed numbers now, but generally, the grid and connect businesses will continue to follow on the same trends. The big question will be restart, a more frank restart of the key markets for us globally. And on PWR-Transmission, as we have communicated before, we are seeing a normalizing of the business, the growth of the business after 2 years of extremely high growth. And so we should be a single digit positive next year for PWR-Transmission.
Julien Hueber: But just PWR-Grid and PWR-Connect. Q3 is exceptional level of organic growth. Remember that what we have as a strategy is to be between the bandwidth, the level of +3% to +5%. That is our commitment overall. When we do have opportunities to grow faster, we take these opportunities, but not at the cost of margin. So selectivity remains our strategy in the bandwidth of organic growth as we have said and we have explained during our last Capital Markets Day.
Jean-François Granjon: Okay, perfect. Just perhaps a last question from my side. Recently, Prysmian announced a new acquisition in the US with Atkore, and they mentioned the fact that they were more positioned, more global solutions, not only cable. What do you think, and do you have the same strategy to be a more global supplier, not only on the cable? You mentioned for sure the growth expected for the accessories, but do you expect a more solutions strategy as mentioned by Prysmian?
Julien Hueber: Our strategy for acquisition, they got three level. The first one is acquisition into geographies where we do see, let us say, dynamic in term of vertical, in term of market, and typically North America is one of this focus for acquisition in this first play of our acquisition. Second play is really to reinforce our position into country where we are already present to have industrial synergies, procurement synergies, but also synergies in the markets. And the third one is what we call adjacent to cable. So this is accessories, but we are also open to other type of products. So the action you just mentioned could reflect the third play of our strategy. Today, we like the accessories business because we do know the margin. We do know the level of the percentage.
Julien Hueber: We will not go for adjacent to cable where the low margin, typically mechanical parts, because we have seen that sometimes this margin could be lower. So we will remain selective in the adjacent to cable part, but it is part of the play number 3.
Jean-François Granjon: Okay, perfect. Very clear. Thank you, Julien and Vincent.
Julien Hueber: Thank you, Jean-François.
Operator: The next question comes from Uma Samlin from Bank of America. Please go ahead.
Uma Samlin: Hi. Good morning, everyone. Thank you very much for taking my question. My first question is on the transmission side. You announced a new interconnection project today for the Menorca and Mallorca project. Would you be able to perhaps comment what is the size of the project and also what are the tendering pipelines that you have in the coming months for transmission? That is my first one. Thank you.
Julien Hueber: Okay. We will start. We are pleased to announce today the preferred bidder for this project. It is a customer we know there well. We had in the past some good project with this customer. It is a small to medium-sized project for us in term of size, so we do not display the numbers, but we qualify it as small to medium. It is a HV AC project, and we will be able to really work on it engineering first, but also our manufacturing second phase by midyear 2027. That is why, and this is how we will proceed. Regarding the pipeline of project, as you know, 2026 does not provide large projects, there is no billion of euro large project in 2026. That will come in 2027, late for second part of 2027, and there will plenty of large project also to occur in 2028.
Julien Hueber: The phasing of large billion euro project will be more second part 2027, 2028. But in the meantime, we do participate to tenders to this small, medium-sized project. This one we announced today is one of them. There will be others, but this one is one of them.
Uma Samlin: That is super clear. Thank you very much. I will just follow up on that. If the tender activities will pick up more towards the end of next year, and I think you said in the slides that your backlog is fully booked until end of 2028, is there any risk of any air pocket in terms of utilization between what the project you can take by the end of next year and what you can do in the plant?
Julien Hueber: No, we do not see any concern or problem. We do have today. When we say we are loaded in 2028, this is in general because the project, for example, TenneT, that we have started and we have announced, LanWin2, will load some of our machines in 2029 as well. Not all projects will stop in 2028. There is already project which are also using our capacity in 2029. But we do flag to a market that we have some part of a capacity available from 2029 onwards. We are confident that the amount of pipeline of project coming will be able to fulfill our line from 2029 onwards.
Uma Samlin: Yeah, that's super helpful. Thank you very much. My second question is on the Grid and Connect side. You had obviously a very strong Q3. It sounds like you see that as more of exceptional quarter due to the seasonality and the larger project. What would you say was a more sort of normalized or underlying growth for these two segments in Q3? I'm just trying to understand how should we think about the medium terms of growth expectation you have, especially into 2027, where you say both Grid and Connect are following the same trends as this year.
Julien Hueber: First of all, our commitment remains the one in Capital Markets Day. We want to grow in a selective manner, 3% to 5%. This is what we've said, and this is the direction we have. Some quarter, specifically this one in Q3, there are some additional projects that we consider as attractive, accretive to margin, important for us to also position the bandwidth of Nexans, work with our key customers also. By anticipation on typically here, I have in mind a large project data center in the US, what is important for us to position ourself in order to prepare also the business for the wave of data center to come in Europe. But also there is some very large and very interesting project in solar. We do see the activities in battery storage growing very fast in some parts of the world, specifically Australia.
Julien Hueber: Looking forward, we are realigning the company to vertical we consider the most attractive to us. These verticals as, let's say, a dynamic organic growth to come. That's why you've seen these numbers in Q3. But overall, I would say long-term, 2027, 2028, we are still committing on 3% to 5% organic growth year on year.
Uma Samlin: Yeah. That's super helpful. My last one is just a follow-up on your comments earlier that the Transmission business, the growth should be positive into next year. Would you be able to help us, to give us a bit more of a building block of that comment? How much is from the MI deal? How much is from the increase in utilization or the new vessels? And how should we think about that growth that you mentioned?
Vincent Piquet: Yeah. I will take that one. It is a mix of everything, Uma Samlin. That business derives its revenues from its manufacturing, from its installation campaigns with the boats, from the timing of the execution of the backlog, depending on each project and how they fall into the calendar. It is a mix of everything, unfortunately, and I cannot really give you the specific details. But all three factors, building on the back of the two years of significant capacity expansion overall for the business, lead us to guide to something that will be single digit positive next year.
Uma Samlin: Thank you very much.
Julien Hueber: Thank you.
Operator: The next question comes from Aurélien Joubert from Goldman Sachs. Please go ahead.
Daniela Costa: Hi, it is actually Daniella here. Good morning. Just wanted to ask two things, but the first one, I think originally you had mentioned in prior calls earlier in the year, then some of your peers as well, that expected another size of large tenders in transmission to maybe come in 2027 and 2028. But I was wondering if on the back of the recent changes in Germany, where they seem to be prioritizing now overhead lines instead of underground cables for the next set of awards, if anything changes in your view in terms of that likelihood that we will get another big tendering season in 2027, 2028, and how do you see the size of the market in high voltage going forward. That is my first question, then I will ask a follow-up.
Julien Hueber: Well, first of all, specifically for the case of Germany, we do have a good discussion with customers in Germany for land high voltage, underground high voltage. So we do not see a massive change from a land high voltage, grounded high voltage to OHL. We do see that in the land high voltage, there are still an intensive discussion about volumes for years to come. So that is not a concern for us. We do also see that in this activity of large project in transmission, there are also, let us say, a new market coming up, and typically what we do see in the US, exactly the opposite. It used to be a market very much overhead line-oriented, that they start now to possibly move to underground high voltage project as well. So no concern about that.
Daniela Costa: We expect a re-acceleration of large tenders in high voltage next year.
Julien Hueber: Yes. As I said, and you know there are Republic information, you know that there will be some large project, in Germany is one of them, but also in France. There is some MI large project to also start in Italy. There is a project between Morocco to France. So there is plenty of large projects to come. As I said, I believe it will be more in H2 2027 on 2028. But we do see the pipeline of large projects to come.
Daniela Costa: Got it. Then just a follow-up in terms of there is so much news flow constantly on the GSI. I think there has been news flow about the seabed survey potentially starting the end of this month. I think yesterday there were talks about a EUR 25 million payment potentially. Wondering how this relates to you. Would you start to receive cash from them again once the seabed survey restarts? What implications would that have for you if that effectively happens on profit recognition and utilization?
Julien Hueber: Regarding GSI, I want to be very careful about that because I do not want to repeat the problem that we faced, if you remember, a year ago or by 2025. I will be very careful. Today, there are ongoing discussion on the political side, diplomatic side. I will let this politics to work on it. When it will be time for Nexans to position and to communicate, we will communicate. At this moment, discussion is at political and diplomatic level.
Daniela Costa: Got it. Thank you very much.
Daniela Costa: Thank you.
Daniela Costa: Thank you.
Operator: The next question comes from Chris Leonard from UBS. Please go ahead.
Chris Leonard: Yeah. Hi guys. Thanks for taking the question. Could I maybe look at the grid outlook and the capacity growth? Obviously, you have spoken on today, and as you learned, you said industrial capacity worldwide is very constrained, so we are looking to add capacity organically here. Can you speak through how material the Morocco Safi expansion is looking into next year and maybe even, is it a two-year ramp? Does it also impact 2028? Then could you also speak to, obviously, the EUR 62 million for accessories, how much we should sort of be seeing in terms of what that can mean for volume growth into the next two years? That would be super helpful. Thank you.
Julien Hueber: Okay. Sorry, the line was not that easy to understand. Basically, if I understand correctly, your question is about the consequences of the additional CapEx for both PWR-Grid and accessories. Well, what I could say, Chris, on this is, what I said is 2,500 is a 40% plus additional capacity, 39% for accessories. That will trigger year after years. You have seen the positive impact it has on Q3. The additional volume we could generate both in PWR-Grid and accessories is a combination of additional capacity, and we have some of our capacity to come in 2027. That is why in one of the first slide of the presentation, I highlighted Safi, Morocco plant to start to produce from mid-year 2027. Progressively, there will be four CCV lines. So there will be two to start in 2027, then the rest will come late in 2027.
Julien Hueber: That will be a progressive ramp-up. This is a greenfield, so it will ramp up, but it will have a full impact in 2028. For the specifically accessories, we have started in 2026 to today to increase our capacity in the European plants, specifically in Belgium. That is why we are able to continue to have a double-digit growth in 2026. The main volume increase for accessories will be some part in 2027, the big part will be in 2028. That is the best I can tell you in term of how we will split and how we will benefit from this additional capacity.
Chris Leonard: Thank you. Sorry if the line was not clear. Hopefully it is a bit clearer now. As a follow-up on the Connect business and what you were speaking to earlier in terms of the organic growth and how data centers have contributed here, maybe there was a one-off big hyperscale contracts. Could you also just drill into that US geography and whether Republic Wire has yet seen any sort of step up in their exposure into data centers that would land in the Connect business? If not, do you expect that then to come in Q4? Could you speak to how they are doing in that US geography transitioning more towards data center customers for Republic, which I think were underexposed previously? Thank you.
Julien Hueber: First of all, we have a very strong integration team for Republic. We have weekly reviews. We have 10 work stream. We have a real strong team, a strong dynamic also from the Republic management team, really embarked in this. We have also a strong sales agent network that are eager to sell not only Republic but other type of products. That drives extremely the synergies, and we are very satisfied with the first four months of its activities. Specifically about data center, that was one of our, let us say, ambition, is to transform progressively this business from a more, I would say, residential, industrial, and commercial focus to possibly to more data center. This is what is happening today.
Julien Hueber: With this business, with this sales network, we are now in the quoting phase of allocating some of capacity, and you know we have additional capacity Republic to the data center. We did add already some gains in Q3, but the majority will really come in Q4 and in 2027 because it needs to adapt some manufacturing capabilities towards data centers, towards the type of product portfolio that are needed and expected in data centers. That will have some impact, positive impact in Q4, but I would say the real synergies relating data center from Republic will happen in 2027.
Chris Leonard: It is really helpful. Thank you for the color. Thanks, guys.
Julien Hueber: Thank you.
Operator: The next question comes from Eric Lemarié from CIC CIB. Please go ahead.
Eric Lemarié: Yes. Hi, good morning. Thanks for taking my question. I got three, if I may. The first one, could you remind us your exposure to France today, and how do you see your business in that country? What kind of risk do you see for Nexans in France? Second question, you mentioned some signs of recovery in Europe for Connect, and you already mentioned Finland and Norway, but I do not know, is there any region worth mentioning beyond these two countries? Last question on data center, I was wondering whether superconductivity cables could be a good solution for data center, especially in the future with very high density data center. Could it be a good opportunity for you?
Julien Hueber: Okay. First question regarding France exposure to Nexans. It is below 10%, more or less, of our total sales. Very confident about the business. You know that for the grid part, we have a long-term, seven years frame agreement with Enedis for the grid part. So with a strong, let's say, increase, committed numbers, committed increase from our customers. We are currently finishing Bourg-en-Bresse additional capacity extension for the grid part. So no concern at all. Regarding the Connect part, there are plenty of project in the healthcare, in the industrial application, but as well in data center. There is a strong pipeline of hyperscale. Some of them are Republic, the Comptece and so. We do not see any impact of France volume today. The business is growing. It is the same for us. I am sure you will see some of our peers in this market, so no concern about that.
Julien Hueber: The recovery of Connect in Europe, I mentioned the Nordics, which is for me half-half, and indeed Finland, Norway improving. Sweden still not. The rest of the European countries is relatively the same as what I said late July. So France, the soft southern countries in Europe, France, Spain, Italy has recovered. So we do see that happening, and we do not see a major change in this market configuration. So we do not see specific risk on that. Then your third question regarding superconductivity for data center. This is a very good question, and this is a very good focus for us. The more we talk with customers exposed to data centers, the more we see attractions. As you know, Nexans has 20 years of experience in superconductivities, initially in other segment like grid applications both in US and in Europe.
Julien Hueber: So we have allocated R&D team to this project because we really do see opportunities for this new technology. Customer in data center are customer which are ready to pay for this technology. This is what we are doing today. So we will not have an impact in Q4. It is a medium, long-term technology, but extremely positive with the key players of the data center world.
Eric Lemarié: Thank you very much, sir. That is clear.
Julien Hueber: Thank you.
Eric Lemarié: Thank you.
Operator: The next question comes from Alessandro Cecchini from Equita. Please go ahead.
Alessandro Cecchini: Hello, everybody, and thank you for taking my questions. The first one actually is still on Connect. You had a very strong growth in Q3, +10%. Last year in Q4, you had a very strong acceleration, +10%, roughly speaking. Just if you can elaborate a little bit more, which are your expectation for organic growth for Connect in Q4, considering this tougher comparison, but also the messages that you are providing on improving trends in Europe? This is my first question. My second question is instead about M&A contribution. You had close to EUR 140 million of sales in Q3 from M&A in the Connect. Just wondering if we need to assume some seasonality or some elements just to plot or to estimate M&A contribution for the very last quarter of the year. Thank you.
Julien Hueber: Okay. Your first question regarding the organic growth of Connect. I think different way to answer to this question. First one is, the reason that we have reduced our exposure to more traditional construction, residential activities to reallocate our sales force or marketing offers or advanced service to verticals we believe are strategic for us. Typically, solar activities, typically battery storage, critical building for fire selectivity, but as well data centers, is one of the reason why we have this type of growth in Connect. But in this verticals, it is also mainly driven by large project. That is why you have seen this 10% organic growth in Q3. We do have other project in Q4, but we do not see that the same level of amplitude at this moment for Connect. Normally, there is not such a seasonality effect in Connect.
Julien Hueber: The seasonality is much more in the grid parts, but the more we reallocate our business, the more we will also drive to large projects in the Connect in this four strategic segments. Keep in mind that Connect is a contrasting segment, so the dynamic in the markets from around Mediterranean to South America to North America or to Europe, countries are very different. For us, how do we allocate capacity? How do we, let us say, develop the type of push of our marketing offers to the right segment that will drive the growth, but some markets remain, let us say, still in our 3% to 5% bandwidth of customer expectation. M&A contribution for Republic, you have seen the numbers.
Julien Hueber: Vincent Piquet has said the numbers. Just to give you a little bit the insight about this, how that was in, let us say, two part in the Q3 numbers.
Julien Hueber: We do not see such a seasonality element in the US in Connect business, which is more regular flow business. Today, we do not see that much of, let us say, seasonality elements.
Alessandro Cecchini: Okay. Thank you. My final question is about, sorry to ask you again on GSI, but just to have an overall picture. You are with the new coming project in Mediterranean to fully load MI line until 2028. Just to understand, if things for the GSI are recovering, I do not know when. Basically, GSI could contribute as a restart to contribute starting from 2028, 2029. Just to understand, given your capacity allocation to MI technology. Thank you.
Julien Hueber: Okay. First message regarding the MI technology, that we have de-risked the GSI project because we are on the way. We expect the customer administrative process to start production of this new MI project by end of the year. That will load our plant until mid-2028. That gives us time for two things. One is to keep working with other projects on MI that are under preparations in the Mediterranean Sea to, let's say, load the plant after mid-2028, because we have several projects under discussion, or give us the time for the GSI, if the GSI will restart, to first do the seabed survey because it is seven months of survey, pre-engineering, pre-financing of the project in order to restart the project by 2028. I think what matters the most is that we have de-risked this project of MI.
Julien Hueber: With GSI or without, that will not change the picture of our financial projection by 2028. We have now two options. On the MI, things are at a diplomatic discussion, but we are also entitled to this working on other alternatives in case.
Alessandro Cecchini: Okay. Very clear. Thank you very much.
Julien Hueber: Thank you.
Alessandro Cecchini: Thank you.
Operator: As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad.
Julien Hueber: No more questions?
Operator: There are no more questions at this time. I hand the conference back to Julien Hueber, CEO, for any closing comments.
Julien Hueber: Okay, so very good. Thank you all for your question and for attending this webcast today. As we enter the final quarter of the year, our priority remains very clear, execution of backlog with discipline, ramping up our new industrial capacity, and capturing the full potential of our recent acquisitions. We remain focused on delivering our 2026 objective and preparing NEXANS for its next phase of development. Thank you all for joining us today. Thank you.
Vincent Piquet: Thank you.
Operator: The host has ended this call. Goodbye.
