Nexans S.A.

Good morning. Good morning, ladies and gentlemen, and thank you.

Thank you for participating in Nexans' conference call. I'm Chris Guérin, the CEO of Nexans; with Jean-Christophe Juillard, Group CFO; Aurelia, good morning, Aurelia, Head of Investor Relation; and Élodie Robbe-Mouillot, Nexans Investor Relation.

Let me turn now to Aurelia who will go over the conference call rules.

Thank you, Chris. I would like to remind participants that statements made during the conference call, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Readers and listeners are strongly encouraged to refer to the disclaimers, which are an integral part of our universal registration document, along with the audio replay of today's call that will be posted on our website, nexans.com. I now turn you over to Chris who will go over the full year 2021 highlights.

Thank you, Aurelia. Before we go over the highlight and deep dive into our business overview and our key financial to end with our 2022 outlook, we wanted to share and to show you a very quick video that sum up this last -- this 3 years equity story, this last 3 years achievement.

Let's play the video. I hope you appreciated this video, which demonstrates Nexans' historical commitment to electrification as well as its unique transformation model to shift its business and focus on value growth.

If we go to the Page 6, at the end of 2021, Nexans achieved its turnaround and is now powering ahead to full-fledged electrification pure player. We have closed the first chapter of the New Nexans Transformation Plan.

Now to go full speed into the second chapter that we named Winds of Change and in that we did introduce last year, February 2021. In 2021, we have reached an outstanding performance, beating expectation in terms of EBITDA, in terms of return on capital employed, in terms of free cash flow.

Just take our EBITDA margin, up to 157 basis points at 7.6% on sales. It's always the constant message, it's all about selectivity.

It's all about value growth focus. It's all about supply chain and price effectiveness.

For a reminder, cable player passed through 100% of the metal price increase to customers, and this cost represent close to 60% of our total cost. Our net income upturned at €164 million for 2021, was for sure supported by copper price inflation, but most of all, by our operational outperformance, enabling us to propose €1.2 dividend per share, which is up 71% versus last year.

On that, we have to mention it, it's an ultimate high over last 12 years. We are as well very, very proud because we just received this information this morning and just adapt our presentation to this new S&P rating, upgrading Nexans to BB+.

It's an evidence of the hard work of our team to strictly monitor working capital and shift to a cash generation model, enabling record free cash flow and a new record low net debt at €74 million. The New Nexans into 2019 to 2021 transformation is achieved, thanks to our SHIFT program, our SHIFT Performance program and as well a constant cost optimization which are, of course, you will see that during the presentation, key enablers of the group exceeding profitabilities and cash generation target.

Obviously, the strategic CapEx we -- that we made through our Nexans Aurora state-of-the-art vessel and our unique U.S. high-voltage plant in Charleston, South Carolina, both assets were fully operational last Q4 2021, of course, boosting our year-end performance.

Let me remind as well the very high quality of our adjusted Subsea High Voltage backlog, now we reached €2.2 billion, which is up 59% versus last year. But it's not a race for volume for volume.

It's important to recall that our focus at Nexans is all about selectivity. It's all about value growth.

And in our backlog, specifically in safety, in -- sorry, in subsea, is really based on solid track record, a unique, really unique risk and reward model, a margin yield improvement and as well making sure that any contract that we take has limited contractual term exposure in order not to jeopardize Nexans' future. With this outstanding achievement, the group is now powering ahead to its 2024 strategic ambition to become an electrification pure player.

First, as I told you, we were -- we will simplify our businesses to amplify our impact. As announced -- as I announced last year, we have signed an agreement to, as a first milestone, to acquire Centelsa, a building and utilities business type in Colombia.

Now anti-trust is pending, but we are confident in closing the acquisition in the first half of 2022. We are so, I'm sure you will have question about it, but we are so confident in announcing a significant disposal in our non-electrification activities by the end of the year.

Second, we will further transform and innovate leveraging on our SHIFT Prime methodology, which has an improvement our SHIFT Performance model, but now really focused on premiumization by implementing new design labs, new marketing organization and, of course, the main objective is to roll out innovation, quarterly-based, to enhance this premiumization. If we move to Page 7, you will find Nexans' performance on this 3 or 4 critical KPIs.

First, outstanding EBITDA, we are above the range, €463 million. The guidance were between €430 million to €460 million.

Outstanding return on capital employed, I remind you that our target that we put in 2018 for 2021 was about 15%. We have reached 16.4%.

Outstanding free cash flow at €179 million. The guidance were between €100 million to €150 million.

And you will -- we will share a video about our E3 systematic model that goes a bit beyond financial KPIs, bridging financial performance on environmental and social performance. But we are proud as well to be on track on several of our ESG commitment, notably ISO 14001 certification that now it's all over almost 89 sites, and it will be close to 100 very, very soon; and as well, women in management position because we are above our target, reaching 24.5%, and still a lot of improvement to be made.

Again, in 2021, Nexans demonstrated its full power to transform, grow value and over-perform on its commitment. Now Jean-Christophe will deep further dive into our financial performance, Slide 8.

Thank you, Chris. As you can see on this page, since 2018, our 3 major KPIs have been growing steadily.

If I start with EBITDA, we went from €325 million in 2018 to €463 million in 2021. With a constant steady growth of our sales, this leads to an EBITDA margin that went up by close to 180 basis points, from 5.8% back in 2018 to 7.6% in 2021.

Now when you look at our return on capital employed, the improvement is also outstanding as we have reached 16.4% in 2021, which is 7.4 points increase versus the 9% of 2018. Last but not least, free cash flow.

We are very proud of our free cash flow generation over the period. From 2018 to '21, we have more than tripled our cash flow generation from €54 million to €179 million.

How did we achieve this successful turnaround? Chris will show you that on Page 9.

How we did it?

Yes, that's the key question, J-C. So let's bring on the page here some graph that you've already seen in the last years.

We have to really be clear, Nexans' successful transformation is mostly due to our powerful in-house program called SHIFT. SHIFT is encompassing every type on best practices coming from the private equity world.

I spent more than 10 years working on it. And now what you can see on Page 9 is that we are - wrap up all our commitments made back in 2018 against our outstanding performance.

First, we have SHIFT most of our business unit that now represent 87% of our sales coming as in now -- declare as profit driver, where those unit as confirmed as profit driver in 2019 were only worse than 52% of our total revenue. So the portion of value burners or transformation candidate is -- keep reducing and shrinking every year.

Second, of course, is our SHIFT program. Let me remind you that our SHIFT program is nothing about restructuration.

It's not about fixed costs. It's really 25 levers of transformation to really reset the software of our company to find a new economical model.

Let me show you on the graph, on what you have on the right side on the graph, these 17 units fully deployed. What was their evolution in terms of EBITDA?

You can see that they have started at €80 million total EBITDA. And 2 years later, they are reaching €170 million.

But what is important to notice is that constant sales. So it's to show you as well that organic growth does not mean systematically higher profit.

It's a very, very detailed action that we have took on the portfolio. It's the same on the working capital.

You can see that we have divided by 2 for those units the working capital in the last 2 years. So as a sum-up, return on capital employed for those unit has been multiplied by 3 in 3 years.

And it's only 17 units. We keep working on unlocking the full potential of the group.

So SHIFT Performance is really the recipe, the unique recipe of Nexans' successful turnaround over the last 3 years. And also, for the next 3 years because we are now moving up a bit our offer, our value chain, our premiumization, and now we are enhancing our methodology with what we call SHIFT Prime.

If we go to Slide 10, once again, just to reflect because we are closing this equity story 2019 to '21, Nexans transformation program is due to a systemic and tight monitoring of our strategy and initiative. As you can see on this page, at the end of 2018, we committed to reach an EBITDA of €500 million, which include IFRS 16 of -- which is including IFRS 16, led to €530 million.

Our initial target were to improve EBITDA by €55 million for value growth, €210 million for cost reduction, €100 million via SHIFT, taking into account an estimated 100 -- negative €190 million price/cost squeeze on labor inflation. So -- and then so total of €175 million.

As you can see, we exceeded that by €30 million, reaching a €205 million EBITDA incremental improvement in 3 years. And all the levers of the plan have outperformed.

J-C, on the next page, maybe?

Yes. Thank you, Chris.

On this page, we look back on our commitments, the commitment we took in November 2018 for the New Nexans Transformation Plan for the 3 years from '19 to '21. You can see here on this page that we have exceeded our target for ROCE and free cash flow, significantly exceeded our target of the plan.

While EBITDA was delayed due to the COVID impact, but we committed to achieve in 2022 the EBITDA target of the plan. If we look at EBITDA, it improved by €138 million to reach €463 million compared to the €500 million of the plan.

As I explained, we will reach that in 2022. Return on capital employed, 16.4%, nothing to say, but very significantly above the target of 15.5%.

And free cash flow, we took the commitment, if you recall, to generate €200 million of free cash flow during the 3 years of the plan. We achieved €361 million, 80% above the target.

So a very significant improvement in terms of free cash flow.

Yes. Now I propose that we jump into our business overview.

So if we jump to Slide 13, this is an overview of the group operational performance, which is, as mentioned earlier, was strong across all our businesses. Over the year, sales were up 8% -- 8.3% organically, from €5.7 billion in 2020 to €6.1 billion in 2021.

In Q4, as you can see, sales grew by 8.5% against Q4 2020, notably due to a catch-up in high voltage, explained by our 2 new strategic CapEx being fully operational in Q4 and, of course, project phasing, like we explained to you during the last quarters. We will come back to that later in more details.

So just a quick outlook, if we stay on the slide, across our geographies. South America was dynamic through the year, up 17%.

Africa and Middle East, up 11%. In North America, in line of what we have over there, 8%.

Europe, 6%. And Asia Pacific, slightly negative, minus 2%, with some slowdown in -- specifically in China.

I should mention as well that the group backlog is up 22%, providing a good visibility in 2022, but more importantly is the quality of this backlog, which is fundamental. If I jump now to High Voltage on Page 14.

First, as expected and mentioned through the year, Q4 witnesses a strong catch-up. This was due to project phasing and the full contribution of our 2 new strategic assets: Aurora and our U.S.

high-voltage plants in Charleston. Second and most importantly, we have a high quality and healthy subsea adjusted backlog at €2.2 billion, evidencing our unique risk/reward model and our leadership on best positioning ourselves on key projects such as Empire Winds, Thyrrhenian Links, Moray West, without forgetting now the full fledge of the Ørsted U.S.

East Coast offshore wind project that are in full motion. As you may see on the right-hand side of the slide, our plant are loaded at 80% with a very strong visibility all the way to 2024, with a project pipeline up to €20 billion on our unique positioning and selectivity model where we position us as being very, very confident to announce this year that our unit will be fully loaded by the end of 2024.

And once again, it's -- the backlog is linked with very high value on low execution risk project. Along these lines, in our new strategic plan, we have initiated investment in the Halden expansion plant, like you already mentioned, above €200 million.

That is now starting in 2022. In Page 15, let's go on Page 15 on Building & Territories.

Now I'd like to spend one minute there because I know that I'm challenged on organic growth, and we are not guiding on organic growth. But once again, here, you can see on the graph the full power of SHIFT Performance program and the selectivity on cross-product customers and -- really to focus on our platinum customers against pure volumes and more customers on more SKUs.

Why you can see that? Because we have generated an organic growth of only 3%.

So I would say a shy organic growth, but the EBITDA has been up 46% at ISO fixed cost. So that's the full power of SHIFT program.

And believe me, the backlog that you see right now at 29% is clearly 100% driven by this value selectivity. More specifically, the building activity compared to utilities is outstanding.

And we will continue our premiumization effort to really turn this commodity business in a top premium market, thanks to this SHIFT Performance model and SHIFT Prime. And you can see it's across all various geographies.

Demands have been very quite dynamic. Our process is working very well in Europe, South America, Middle East and Africa.

North America has slightly declined, as you can see on the graph, due to the closure of our plant in New York state called Chester last June 2020. As we had explained in Q3, the utilities activities witnessed a transition year, made of a lot of frame agreement renewals in Q3, notably in Europe.

But in both segments, we will kickstart 2022 very confidently with a very, very strong backlog and a high visibility, notably in the utility segments where demand is sound because we need to renew in majority of the countries the power grid. And as well, our thanks to this great frame agreement renewal that we have been able to conclude last year, our market share is increasing through our platinum accounts in utilities.

If we go to Page 16, last one, it's a word on our Industry & Solutions and Telecom & Data. First, Industry & Solutions performance was robust through the year, boost by automotive harnesses and as well automation.

Our EBITDA, as you can see, is up to 42% over the year. Our margin is coming -- is going from 6.9% to 8.7%.

Auto harnesses activity was particularly strong in H1, thanks to the hybridization of the cars. While Q3, of course, because of the semiconductor crisis, witnessed a slowdown.

Q4 was back to normal pre-COVID-19 level, which is, of course, a good news. And now Q1 2022 is running full fledged.

Automation is solid sales. We're supported by a very strong demand in Europe.

And as well, transport aerospace continues to recover from COVID-19. There is only a rolling stock that challenged a bit because of the slowdown in -- of demand in Asia, specifically China.

Second, Telecom & Data, EBITDA margin improvement over the year was also quite solid, reaching an 11.5% in 2021 against 7.5%. All activities demonstrate sound performance, and that's sequential, and I think it's running well.

We have to be careful regarding the backlog. The special telecom, submarine tech business had a very huge backlog in 2020.

Now we consume it in 2021. Now we have a normalized backlog, so that's the reason that you see a very slight slowdown on the backlog.

Now let me hand over to J-C, and J-C will go back to the detail of the financial.

Thank you, Chris. If we start with our, basically, performance on EBITDA, you see that EBITDA has been growing up very significantly against last year, 33%.

And you can see on this bridge on this slide that all of our business group, all of our businesses have strongly contributed to this €124 million improvement. If we start, if I look -- if we look at the P&L and we start with the sales, 6 -- a little bit over €6 billion, up 8.3% in terms of organic group -- or growth.

A nice recovery versus 2020 negative organic growth due to COVID. I would highlight a strong demand, a positive mix/price management from the company in 2021 and, of course, the High Voltage end-of-the-year ramp-up in line with project phasing and the new full potential of the new asset, mainly in the U.S.

EBITDA outperformance at €463 million, as Chris mentioned, is supported by our selective growth, supply chain effectiveness, structural complexity and fixed cost reduction and the fact that we exceeded, as Chris mentioned earlier in the presentation, our targets on all the levels of the transformation plan. Further down on the P&L, the operating margin significantly improved, as you can see, from €299 million versus €193 million in 2020, leading to an operating margin rate of 4.9% versus 3.4% same period of last year.

Operating income grew to €338 million in 20 -- in the year against €246 million in 2020. Of course, we have to notice the core exposure impact of €106 million this year, boosted by the copper price increase during the 12 months of 2021.

The reorganization costs, at the same time, dropped to €58 million against €107 million. It includes some reorganization costs linked to the group transformation in itself and also some write-off following the -- our plant in the U.S., Chester.

Net income lands at a positive €164 million for the full year 2020 against €80 million for 2020, and includes net financial expenses of €101 million versus €54 million last year -- in 2020, sorry, mainly related to the impairment of some financial investment, notably in Lebanon where the geopolitical situation remains very difficult and negative foreign exchange impacts. If we move now to the next slide and we look, as I present to you every 6 months now, the growth of the progress on our EBITDA when we look at the different levers, pillars of our equity story.

If we look also at the EBITDA margin, in 2021, it's up 157 points to reach 7.6%, as we said. The key components of the EBITDA improvement are based, as you know, on the new transformation plans.

And we can describe them as follows: €50 million of cost reduction in the year 2020; €35 million from SHIFT deployment across our units in the year; and a €33 million improvement in EBITDA coming from our value growth initiative, which is mainly the additional EBITDA from the High Voltage segment. This is offset by €61 million of inflation and price/cost squeeze.

You see that we have recovery from last year, we estimate at €56 million, which is additional volume coming from 2020 COVID-19 impact, and that obviously also support the improvement of the EBITDA. So overall, this improvement in EBITDA in absolute margin demonstrates the full power of our transformation plan and for which we are just now closing the first chapter.

We are now, we believe, very ready. We are on the starting block to -- for the second chapter that will fully unlock our potential.

If I move to the next slide, and this is also quite remarkable, I would say, because we have year-after-year consistently reduced our debt level and improve our balance sheet. You see here that the net debt at the end of 2021 is reaching a 10-year low level at €74 million.

This is definitely demonstrating the mindset of the group and the focus now on cash flow generation for Nexans. Cash flow generation from the businesses achieve -- amount to €389 million.

And we continue to have an improvement in our working capital, €111 million. And altogether, we generated €179 million of cash generation, above our target, despite, I would say, still €99 million of cash outflows from our reorganization plan.

Also to notice on this net debt, which is important, is the CapEx level. That continues to be, I would say, above the normalized level of CapEx due to our investment that continued in 2021, mainly in Aurora, our new vessel that is now complete in the operation, but also in the transformation of our U.S.

plant in Charleston. We also started to spend some CapEx in 2021, limited, but some CapEx in our new phase of the 2 additional line in Halden.

Altogether, we spent about €80 million on strategic CapEx, explaining the €206 million, I would say, of total CapEx spend in the year 2021. We had also financial interests, and those have been reducing because we have done -- we have made in early 2021, from debt repayment, we had the PGE, the French state loan.

We had also an expensive bond of €250 million we repaid. By the repayment of those bonds, we reduced our interest charge by about €8 million per year.

If I move now to the next slide and we look at something we have been very proud in Nexans over the past 3 years and how it demonstrates the efficiency and the power of our transformation, it's our working capital. As you can see on this graph, it's quite impressive to see that despite the rebound of the sales that started at the beginning of 2021, after the COVID, the worst of the COVID in 2020, sales rebounded significantly.

Again, we had 8.4% organic growth in the year. But we maintain our working capital on sales ratio at a level -- at a historically low level at about 4%.

So we managed, through our tight discipline, through SHIFT, to maintain working capital at a level, and this is why you saw on the net debt graph that working capital contribution to cash was about €100 million, €110 million for the year. We continue to believe that 4% is a very low level, but we commit to stay below 6% to 7% in the future.

On the next slide, on our balance sheet, as you can see, and Chris mentioned that in his presentation, this morning, we've got the news, the confirmation that Standard & Poor's upgraded Nexans' rating to BB+. This is...

Thank you. Thank you.

This is a very nice news for us. A very important, I would say...

Recognition?

Recognition from our rating agency. It demonstrates that, basically, there is credibility in our plan, that what has been achieved is definitely strengthening the balance sheet of Nexans, and the outlook is also positive.

It's also put us in a situation to be extremely prepared and ready with this balance sheet to basically face this new chapter of our strategy until 2024 to become a pure electrification player. If we look at the ratio, I will not go again on the ROCE because we discussed about ROCE in the previous slides.

But from last year, obviously, the increase is quite significant. You can see on our 2 covenants, on our debt covenants, whether it's a gearing ratio or the leverage ratio, that we continue to significantly improve the ratio.

And we have significant headrooms on both covenants now, thanks to the fact that the balance sheet is almost debt free. On the next slide, on Page 23, having a look at our liquidity position, we have cash on the balance sheet for close to €1 billion, €972 million cash on the balance sheet.

We have our untapped revolving credit facility for €600 million. And the new, that we announced a few months ago, the new facility from the European Investment Bank for €200 million, which is undrawn, giving us a total liquidity level of €1.8 billion, again, putting us in a very good situation to face the next chapter of Nexans.

With this review of the earnings, I will hand over to Chris for the conclusion.

Thank you, J-C. Now we -- as we have successfully turned around our business, we are now powering ahead to become the full-fledged electrification pure player.

To do so, we have, first, an amazing tool that I want to share with you that we already introduced last February 2021, the E3 license to operate. Today, world's complexity requires a reset of our management performance model, converging the economics, the financial objective with the environment objective and as well the engagement of our teams.

And we need to put all the 3 pillars, economic, environment and engagement, under a new systematic model. And our manager requires today to face those new objective and systematic approach.

They require new trainings, new tools to take the right business decision that will generate profit, but not at the detriment of the environment or our team motivation. In order to sum up this -- how the tool is running, is working and that is fully launched in 2022, I asked Olivier Chevreau, our VP Sustainability Officer; and as well as Fatima working with him regarding all data and analytics, to introduce a first movie on how the tool is working.

Let's have a very quick video of 2 minutes to explain.

Our teams imagined, designed and delivered a new performance tool to establish the road map for a sustainable Nexans. We are able to make our carbon emissions across the entire value chain in regards to financial KPIs and simulate scenarios to get the best projects in terms of carbon neutrality contribution, one of the first tools to support our E3 performance model.

It measures the business unit performance, combining the financial return on capital employed and the return on carbon employed. Four key partners joined us in this exciting journey.

Our solution is smart and powerful. It measures forecasts and the actual data from our business groups to our plants by scope, type of emissions, supplier and customer.

We can analyze the correlation between SHIFT transformation, financial class trend and the CO2 emissions for each individual units. Surprisingly or not, the most profitable units named profit drivers and innovation drivers are also green drivers, while the value burners having financial difficulties appear to be resource burners, meaning polluters.

Our downstream transportation is an important source of CO2 emissions. We have the ability to analyze our customers' portfolio, taking into account their volumes, their performance and their distance from our plants because our aim is to produce local for local through short distance.

When the distance is too high, we need to find solutions for the planet while keeping our business. We simulated the scenario, carrying transport mode for customers located more than 1,000 kilometers away from our plants.

We replaced gas oil tracks by compressed natural gas tracks to reduce the CO2 emissions. We can see a positive impact on our results.

At Nexans, we have decided to reinvent the model in a more inclusive way between economics, environment and engagement. This is the first video of a long series.

This is the first tool, as the one we've just shown, of a long service; a tool to reinvent our decision process within economics and environment; the first tool to show that profit cannot be detrimental to the planet; a tool to focus on value for the company, both in terms of planet and profit. Our role for E3 is to bring a new performance model to our management teams in order to steer the company structure in a systemic way.

E3 is now embedded in our operations and performance assessment of our business units. As you can see, beyond words, Nexans is dedicated to deliver its commitment to electrify the future in a sustainable way.

Thank you. So you've seen a complete new tool that goes very granular, unit by unit, everywhere in the world, in very, very much details for our key leaders to take the right decision between economics and environment.

And there was nothing existing in the market. We have decided to making our own, develop our own tool.

And it's a -- believe me, it's very, very powerful. Let's go now to Page 26.

And after, we will end this presentation with the guidance. So on Page 26 is the official launch of our new innovation, ULTRACKER.

It's an end-to-end augmented supply chain solutions to really support by our customers, by Internet of Things, moving our product into smart solution from passive to active components. And as demonstrated, this innovation cover the 4 key steps of the entire value chain, from the purchase to the inventory to the delivery up to the geo-localization of the assets.

And if you add up VIGISHIELD, you as well protect your asset because cable are very, very important asset for our customers. Now let's conclude with Page 27 on our guidance.

So our '22 guidance, excluding acquisition and divestment, is our commitment to generate an EBITDA between €500 million to €540 million. The free cash flow, expected to be in the range of €150 million to €200 million, reflecting the additional strategic CapEx to be deployed in 2023 in High Voltage for the 2 additional line in Halden.

So that's the reason that we are as well talking about normalized free cash flow. I'm sure that you will have question, and J-C will answer to that.

These assumptions are, of course, based on the current macroeconomic environment and assuming no material impact from COVID-19 or any geopolitical event. So in line with our 2022 and 2024 road map, we are no longer providing a return on capital employed guidance.

And last but not least, as mentioned into the introduction, we will propose to the general assembly a €1.2 dividend per share, which is represent a record for Nexans on the 71% up versus last year €0.7 per share dividend. We thank you for your time.

We are ready for Q&A session. It's 9:45.

Floor is yours. Thank you.

Just my first question was around the margins in High Voltage. Obviously, we're at sort of 17.9%.

It's a very healthy level. Should we assume that, that level can continue as we go into 2022?

And then thinking a bit more kind of bigger picture, when you talked about your electrification margin targets for 2024, did you envisage that sort of High Voltage would be around these levels? Or do you assume kind of, in the context of those 2024 targets, we can keep seeing improvement from these levels?

Or will the rest of the improvement come from Building & Territories from here within electrification?

So thank you, Max, for the question. I will take the answer to the question.

So the first part of the question was to the level of the margin of High Voltage. So definitely, we talked about that.

If you recall, in our Q3 result presentation where we had, in Q3, I would say, a low level in terms of sales and margin for High Voltage. But we are confident at the time that the end of the year was going to be fantastic, and it happened.

We've had a 58% organic growth from last year same quarter and about 55% from Q3 to Q4 in terms of sales. And the margin also improved significantly.

And the margin improved because of the quality of the backlog, the quality of the project in the backlog, for sure, the flawless execution, and also the fact that in the fourth quarter, we had 2 -- the 2 vessels doing installation and the high level of installation. So that also basically was part of the improvement of the margin, significant improvement of the margin.

We are very proud of this level. And we believe this is sustainable because, again, you've seen in our backlog, our backlog increased, but what we are the most proud of is that the quality of this backlog is very good.

It's very high. You know that when we are lucky to be in a market that -- where the pipeline is extremely important, and therefore, we can be quite selective in how we decide to tender and select our project.

And therefore, the quality of the backlog is there. Maybe it's not the record high backlog of the industry, but it's, for sure, a very good quality backlog.

So I am confident that 2022 will be at the level of what we've seen at the end of 2021. So that's the first thing.

The second question was regarding 2024 and our margin in '24. Definitely, we had a margin improvement when we did our equity story, our CMD.

And we committed for the 300 basis point improvement in our total EBITDA margin at group level. A chunk of that was coming from High Voltage, for sure.

Now I would say that what -- the success of the end of 2021 give us, I would say, some good news for the execution of the next 2 years. And the quality of the backlog, I described also, give us some good level that at least we will be in the target or potentially better in 2024 when it comes to High Voltage.

So part of that was included in the improvement of the margin. A big part was coming from SHIFT, to be honest, and Building, let's be honest.

But also, part of our, I would say, margin increase in High Voltage, we had the reduction of the land part and the improvement of the land part as well as better margin also for the reason I mentioned on the backlog on the subsea part. So all of that going into the direction of the improvement.

And we are, with what we announced in Q4, very well -- starting very well this improvement road map, I would say.

Okay. And maybe just sort of a quick follow-up on sort of what you're seeing in the offshore wind industry.

And I -- we get the question quite often around some of the disruptions that are being seen across other parts of the value chain, whether it's producing turbines, whether it's actually installing the projects, companies like Sitem posted a profit one recently. So I just wanted to understand, how do you protect yourselves against delays in other parts of the value chain?

And are you seeing kind of any impact on the timing of revenue recognitions? Anything on delays in other parts of the industry that has a knock-on effect to your ability to produce cables, recognize revenues and deliver projects on time, how do you manage that?

And should we be aware of that as a risk?

I think we always give a certain room of flexibility project by project into our backlog and not to have a too rigid backlog where we can have a very negative domino effect. We are more concerned by weather forecast for installation of the cables than really delays on our customer front, first, because all our customers know that the sector is pretty full in terms of capacity.

And if you start to delay one project, it's not a delay of 6 months. It's potentially a delay of 2 years because we need to keep running all the others.

So today, the time we speak, Max, we don't encounter any delays or a delay can be a month, but nothing material, and we are very positive for the year to come.

Firstly, I wanted to start on the balance sheet. Net debt and leverage, clearly very low.

Can you talk about the firepower that you have now in the balance sheet to pursue further M&A, regardless of any disposals? And also, does this improve leverage ratio, meaning that we're more likely to see an acquisition near term than we are a disposal?

So thank you for the question. Definitely, we -- when we put -- when we prepared our equity story, our CMD, and we look at 2024, we communicated already, I communicated already on the deleveraging of the balance sheet with the cash flow generation.

So we are completely, with 2021 ending, completely in line of this -- for this deleveraging. We have, like you said, debt-free-almost balance sheet.

Give us a lot of firepower, we estimate to be about €2 billion of firepower. We will not exceed leverage about 2.5x net debt to EBITDA.

That's the commitment we took, and that give us this 2 -- about €2 billion of, I would say, magnitude about -- firepower about -- for deployment of capital. I think what is important also on top of that is the proceeds from the divestment that will happen.

We are, I would say, progressing well in that direction. And like Chris said in the presentation, this year, 2022, we are reasonably confident that we will enhance the divestment.

And with the level of the multiples today, we believe we will sell very well those assets and that we can count on an additional, we estimated at the time, and I can confirm that, about €1 billion of additional, I would say, firepower to deploy our -- to do acquisition with the proceeds from the divestiture. So everything we announced in February is -- remains, I would say, accurate and remains the right vision we have for the business.

One last thing I want to say about that is that we want to make sure we pace the divestment and the acquisition. We don't want to divest all of the asset, non-electrification asset and do the acquisition after or the other way around because we want to make sure we maintain a certain level, I would say, of turnover for the group for obvious reason of cost structure.

But I would say that this -- we announced the Centelsa a few months ago. We should be closing that in the coming months.

And as I said, the divestment will be in about the same time frame in 2022. So we are well progressing on that, and we are compliant, I would say, with what we announced in February.

And second question is on stimulus for the industry around electrification. Progress on getting money to the market in the U.S.

and Europe through Build Back Better or Green Deal has clearly been slow, perhaps slower than many expected. Do you get the sense that there is additional demand waiting on the sidelines for the final details of these packages to be announced, which means that some projects might be getting deferred?

Do you have also any view on timing between stimulus measures being finalized and those demand actually translating into extra projects for Nexans?

Yes, George, I will take the question. Yes, of course, there is a huge stimulus in U.S.

with Land High Voltage corridor. For example, we believe that some will start right now, but some will be postponed.

But in general, for the world, we are not worried at all. And I think we need, a matter of fact, we need to sequence a bit the things because all countries want everything at the same time.

All countries wants to shape their generation of electricity from fossil fuel to carbon-free energy. All countries wants to renew their power grid.

Aging -- those assets are aging more than 50 years. And every country wants to electrify the cars.

So the problem is that it will generate a huge bottleneck at the cable level, but as well on the copper level. So what is important to keep in mind, George, is that we are at the beginning of a super hyper-cycle of electricity, of electrification, which will have exactly the same magnitude that what happened between 900 -- 1900 to 1920 or 1950 to 1970, 20 years of massive investment for the generation of electricity and the setup of the power grid.

We are now, at this moment of time, where the next 20 years will be all about electrification, will be all about energy, will be all about electricity surging everywhere in the countries. So we need to massively invest in the infrastructures.

So some countries may have some delays, but there will be always other countries or other demand that we'll always compensate. So we are at the beginning of a huge hyper-cycle in electrification.

My only risk that we need to monitor is the access to raw material, specifically copper and aluminum, to follow this trend.

Thank you. We have a question from Luigi De Bellis.

Can you elaborate on the expected contribution on a 12-month basis from Centelsa at sales and EBITDA level?

Yes, I can do that. Centelsa is about €230 million sales business and EBITDA margin at 10%.

Obviously, this is pre-synergy numbers. So we will -- when we acquire this business, we will develop and implement our methodology of SHIFT that has shown in the numbers of 2021 the very good, I would say, power to improve.

And therefore, we are quite confident with the synergies and the SHIFT deployment that we will boost the margin of the business.

Yes. That's very important because we want to demonstrate, through the improvement, our own financial result on this.

The fact that we keep -- can unlock full potential of the company, that everything that we are doing for Nexans is duplicable for any kind of acquisition that will come in the coming 2 to 3 years. So yes, it will be very accretive.

A follow-up question, still from Luigi. Can you give us an indication of the organic growth by divisions implied in the midpoint of your '22 guidance?

What I can tell you is that we have, I would say, moderate organic growth. We -- again, this is not something we guide, and this is not something where we build our future result on.

We are not betting on situation we do not control. So organic growth is also a lot due to market and environment, and we will not come with -- we will not be aggressive into our guidance number when it comes to that to come later with a disappointing news like Nexans has been doing in the past too many times.

So I would say that it's important to say, and I will not give you exact percentage because, again, this is not the purpose of how we build our guidance, but definitely, there will be growth in High Voltage in 2022 because we have now new assets. They have come into operation at the end of 2021, and they will be fully operational in 2022.

So one would expect that, obviously, organic growth in High Voltage and Subsea more specifically will be quite significant. At the same time, we will continue to grow moderately on the Building & Territories in terms of percentage because, again, that's not where we are seeking for volume.

We are looking for value, so moderate growth, a couple of percent on Building & Territories, for sure. There will be potentially a little bit more growth than the average on Telecom & Data because it has been a little bit slow in 2021.

Following the COVID of 2020, '21 has been a little bit slow in the ramp-up on Telecom, and we have been a little bit behind. So there will be -- we expect a little bit higher than the average growth for the group, a little bit higher in Telecom & Data.

But at the same time, we say that we will start to reduce our metallurgy. Don't forget that metallurgy is a -- was a quite significant sales contributor to Nexans over the past years, about €1 billion.

It's quite dilutive. You recall that the margin of this business is around 1.5 percentage EBITDA on sales.

And our strategy, as we announced it, for 2024 is to serve our sales first, limit basically external sales on that business. And therefore, there will be a contracting reduction of sales on this business that will be starting moderately, but will be starting in 2022 as part of our strategy.

So you will have a little bit of negative organic growth coming from that segment. Altogether, I would say that between 4% to -- 3% to 5% total organic growth for the group is what we targeted for 2022, but again with some up and some down, as I described.

And again, this is not where we are betting for our midpoint target for EBITDA.

Yes. And let me add as well that it's a constant debate that we have with some of analysts regarding organic growth.

So we don't want to guide there, first, because in your question, you don't ask if it's made of price or volume. You don't ask if it's made of green or brown product.

And you don't ask if organic growth is made of secular product, that means recycled raw materials that we use for our organic growth. So I think we need to specify what is organic growth.

And that's the reason that really I focused the team on the entire Nexans on generating value. And SHIFT program again demonstrate you that with very limited growth, we are able to, just for B&T business, grow our EBITDA by 46%.

We have been able, through our SHIFT program, with no growth, to triple return on capital employed. So after when you really have segmented clearly your product and your customer portfolio, which is considered platinum for the company, then you can grow.

But before, you need to make sure that your portfolio is made of good cholesterol and as well good customers and good product. So that's the reason we are not guiding organic growth.

Thank you. We have another question on 2022 guidance from Matteo Bonizzoni.

The 2022 guidance range is quite large, €500 million to €540 million. Can you elaborate on key moving parts and, in particular, your expectations on cost inflation outside metal and polymers, in particular, labor and logistics?

So the range is €40 million. We don't believe it's large.

I mean we've been guiding on similar ranges in the past. We prefer to maybe have a little bit wider range at the beginning of the year and then come back in the midyear like we've done in the last year and the year before with a narrowed and hopefully improved guidance rather than being in a situation where, as you know, last year was still the tomorrow of COVID.

We still have a little bit of uncertainty when it comes to COVID. There are other geopolitical situation in the world.

So right now, we feel more comfortable with the range. We are very comfortable to achieve this guidance, obviously.

And we are, I would say, in a position, if things move as planned, to deliver some good news in midyear.

More specifically, we can have that -- we have this cleanup of customers and product portfolio. And you have seen that our backlog in all business is pretty robust for the beginning of the year.

Yes, exactly. And for the inflation, so again, the question is about 70% to 75% of our total cost is passed through.

If I take all the metal part plus the indexes on the polymer that we have, I mean the moving part would be transport and logistic, but this is quite small when it comes in the cost structure of Nexans because we are -- except for High Voltage, but for the other businesses, we are manufacturing where we are serving our customers for the most part. So the transportation logistic is not that significant.

Wages and salaries, salaries, wages is definitely subject to potential inflation in 2022. It is about 7% to 8% of the total cost of Nexans, so not that significant as well.

We have about 11,000 of our 26,000 employees which are in low labor cost countries. We...

For the harnesses business.

Mainly for the harnesses -- yes, for the harnesses business, exactly. And if we see the level of inflation that we've seen in the second part of 2021 and that continues to '22, that will not be a problem or that will not cause material issues to our guidance.

And to absorb it.

We can manage it, yes.

Can I just dig a little bit into the others? It was quite a large loss in the second half, €18 million.

Just to understand what's going on there and how we should think about it in '22.

That's mainly -- the others is mainly the corporate costs that are not reallocated to the business. It's -- there's nothing really business-driven onto that.

It's only allocation of corporate cost not allocated. We had some, for instance, consultant costs and some other costs centrally that we did not allocate to the business, and they're staying into the corporate center.

But...

The incentive plan.

And some incentive plans also, but that's about it. It has nothing operational, I would say.

And I mean, can I ask you then, on Centelsa, the synergy targets, so are you looking at a percentage of sales? Or how should we think about the kind of synergy potential for Centelsa?

A bit early to say, Sean. But of course, the traditional, I would say, purchasing, cost allocations as well specialization of the units, because we have already one unit, we are #3 in Colombia, so we can better specialize the production assets.

But the biggest potential is what you see in B&T words of Nexans today is the SHIFT Performance and the premiumization of our offer. So you can see this development of B&T business over the last years and specifically, the Building, which is a very impressive trend.

And that's all this dynamic and full potential way of doing that we will implement into Centelsa.

And if I can just -- a slightly broader question. I mean thinking about general overall valuation levels in the market being quite high, it would still appear that we are in kind of a seller's market.

I mean, is a further acquisition dependent on a sale at this point despite the increased firepower?

No. No, no, no.

An acquisition -- a further acquisition is not dependent on the sales. I mean if an acquisition that makes a lot of sense or a strategy comes up tomorrow, we will do the acquisition tomorrow.

I mean the -- we are diligently working in our plan. But again, I mean we have the flexibility on the balance sheet to -- even to do a full acquisition before we can do divestment if we wanted to.

This is not the aim and the objective, but we could do that. So what is important is the quality of the asset, how it fits our strategy, obviously, and obviously the multiple at which we will acquire the asset.

So the first question that I wanted to ask is just on the dividend per share. I mean it's obviously higher than last year, and I think it's higher than it's been in at least the last 10 years as well.

Can we think of that now as the floor going forward?

So yes, this definitely -- this is -- the answer to the question is yes, we wanted to catch up on the delays we've had in dividend payments from the past years and the ups and downs. We wanted to achieve -- to come back to a dividend yield level that was more acceptable for the level of the industry.

We believe we are still a little bit behind. But from that, this is a starting point.

And from that, we will grow the dividend per share every year.

And it as well demonstrate our very positive outlook of the development of our business on the full potential of Nexans.

Okay. Great.

And then another couple of questions, quickly. Do you have any effect on the backlog excluding contracts which are not yet fully secured and how that's changed year-on-year?

And then if you give a quick update on the German Cartel investigation, if you've had a meeting, that will be really useful.

The first question?

I missed it.

I missed the first question about backlog...

It's about backlog.

About the backlog, can you repeat?

It was just on backlog excluding contracts that are not yet fully secured.

Yes. So yes, so basically, the backlog is about €500 million less, so it's about €1.7 billion.

And regarding the German Cartel, Nino?

Yes. Nino Cusimano.

On the German Cartel, as you know, there is an investigation by the antitrust authorities in Germany. It's an investigation that is limited to Germany.

And just to put things into perspective, our business in Germany is a €200 million business, and this compares to some of our other competitors who have much larger businesses. First of all, we believe we've done nothing wrong.

And it's an investigation on the -- what they call the DEL-Notiz, which is an index. There's many indexes in many industries.

And again, just as another piece of information, the DEL-Notiz has been investigated by the antitrust authorities in the past. Over the past 20 years, there's been a couple of investigations on grade, and those were cleared already.

So we are not concerned. We'll work with the authorities.

We're doing our own consideration -- our own investigation. But this is -- really doesn't concerns us too much.

Thank you. We have a question from Cyril Charlot from Sycamore.

What will be the real CapEx in 2022 versus normalized?

Okay. So the real CapEx for 2022 is about €150 million.

The total CapEx will be €360 million. The difference being, obviously, the strategic CapEx and the investment we are making into our 2 additional line for wind offshore in Halden, Norway as part of what we communicated in 2020 -- February 2021, during our CMD.

Clearly, the bulk of the CapEx for those strategic is coming this year and, therefore, impacting CapEx and cash flow, obviously.

Yes. We have another question from Matteo Bonizzoni.

Full electrification ambitions, this is a bold promise, which implies large portfolio rotation by end 2024. Which progress should we expect in '22?

And this portfolio reshaping both disposals and acquisitions?

Matteo, it's what we say now, we say that we have started by an acquisition. This is the one of Centelsa after we are going through antitrust proceeds.

And we hope to have a green light by the end of June. In the meantime, we are very active on disposal, making a lot of great progress.

And that should be the next announcement of the group is a disposal of a large activity. And after, we're back into the sequence of acquisition.

Of course, we are not starting from 0. There is already pretty engaged discussions with potential companies.

And we'll come back to you in due time, but we would always expect this sequence.

Yes. Matteo also has questions on the High Voltage backlog.

Are you still prioritizing submarine versus Land High Voltage and keeping a selective approach on tendering? What about pricing in High Voltage?

Yes, of course, I think we had those questions hundreds of times in the last years. The -- my answer is look the EBITDA ratio on sales, look the EBITDA ratio on sales, 18%.

We have now tools in managing subsea and land business that we are not there before. It's not simple tools.

It's about financial modelizations, technological modelization, planning modelization. So it's a very impressive model that we've put in place.

And that really helped our team collectively. And it's really -- those decisions are taking at the executive committee level to really define which project fit the best with our risk/reward policy, with our margin yield model and with our contractual term exposure.

So we classify all the projects, more than 100. We have a focus on 10 of them for the next to come where we say this is the one to win.

And I will not tell you which one because my competitors is always screening every words of Nexans. But -- and the team is focused on those one.

And that's really -- once again, it's not a question of momentum of the business. It's about taking the right decision with the right tools.

And our teams before lack modelization, lack decision process supported by data, data analytics. And this is really where we put full power to take the right decision for our future.

And that's back to the question of Max, yes, we are confident on the constant level or improvement of EBITDA ratio on our High Voltage business. And sometimes, you can see that in terms of margin yields, our contractual terms exposure, if we believe that subsea is much more, I would say, better in terms of scoring than land, we will always favor subsea in that case.

But it's not true all the time.

My first one is a clarification on CapEx guidance, Jean-Christophe. So you mentioned €150 million normal and total is €360 million.

Can you confirm that number? And then also if you can provide a bridge from EBITDA guidance of €500 million to €540 million to €150 million to €200 million free cash flow, particularly, what you have baked in for working capital movement?

So that's question number one.

Yes. So sorry, maybe I didn't speak clearly.

It's not €360 million. The total CapEx is €316 million -- sorry, €315 million, €315 million.

Out of that, you have about €163 million, which are the strategic CapEx, and about €150 million which are the normal maintenance CapEx of the group. So that's basically what comes up with our CapEx story.

So definitely, total CapEx, a very high number when it comes to CapEx, but again, for a very good return on those CapEx to deliver our 2024 commitment. Then the question was what, on the EBITDA guidance, €500 million to €540 million, and what is in terms of cash flow.

So in terms of cash flow, the guidance, let's be clear, what Chris presented in terms of free cash flow is normalized free cash flow. This is not to compare with the free cash flow that we were guiding until last year.

Why did we change? Because this is in line with our equity story for '22, starting '22 to '24 where we talk about normalized cash conversion rate, if you remember, where we committed that we will be above 40%.

So from this first year, I would say, '22 is the first year of our new equity story, we are now guiding according to this new metric, and therefore, we dropped ROCE. That's the first thing because we did not commit for 2024 on return on capital employed on the total group, only for electrification, but not for total Nexans.

And the second thing we said is we now talk about -- commit about, I would say, a normalized free cash flow. So what is normalized free cash flow?

It's the cash flow of the group, as we reported in the past, adjusted from 3 elements. The first one is the strategic CapEx.

The second one is the material PPE divestment, tangible asset divestment, if we had to have some. And the last one is the normalization of the taxes in Norway.

Norway has a quite, I would say, different tax regime where basically you pay your taxes on your profit when the projects that generate the profit is completed. So you have, I would say, a nonlinear tax cash-out.

So what we say is we will normalize for this tax, I would say, difference. And that's the 3 elements that we take into consideration into the normalized free cash flow.

Just to give you some bridge, if we were guiding to the previous standard of free cash flow, the cash flow would be about €50 million.

That is very clear. And my second question is on inflation and net price/cost squeeze.

So we had €61 million in 2021, €55 million in 2020. What have you embedded in your 2022 guidance of €500 million to €540 million?

And I would assume you have included some price increase to offset this inflation situation. So maybe if you can comment on pricing and how confident you are to offset some of these headwinds through better pricing.

Yes. So €61 million in 2021, it's made of, typically, it's made of about €30 million of pure inflation on -- mainly on salaries and inflation on wages, and about €30 million of price pressure and material price increase.

So that's basically the rough split of the €61 million, which is quite consistent with what we've seen over the past 2 years. You remember our equity story was saying €190 million for 3 years, which is roughly €65 million per year for the 3 years.

We did €61 million in 2021. So that's basically in the ballpark.

What we see, we took a little bit, I would say, of a higher level in 2022 because we believe that inflation will probably remain a little bit longer through the year, to the low -- higher level of the end of '21. So we are running, I would say, about €10 million higher than that.

For the rest, we believe that through SHIFT again and through our price increase management, we will offset, as we have done in 2021, we will continue to offset the inflation into our product.

Yes. And we have now a new bucket that we have -- we didn't have before is innovation.

We are putting full power on amplifying our innovation approach to move from transactional sales to value-based sales. We have a new -- you have seen a new Chief Marketing Officer at the Executive Committee level.

We are turning around all our company to much more innovation-driven mode on as well more marketing. So of course, that implies premiumization and that implies higher margin.

So you also answered a couple of my questions. Nevertheless, 3 other questions, please.

The first one concerns the future awards. Could you give us some more color on what do you expect for the next awards for the coming months?

The second question, could you comment on the M&A strategy? And what do you expect for the coming months?

And due to the fact that the -- probably, the acquisition -- based on acquisition with a higher price, the ratio of the acquisition will go up. So are there any risks to see some delay for your next acquisition due to the fact that there have been some more money?

And just -- I don't understand well, but you mentioned about the CapEx for 2022. So could you come back on that?

And the last question, could you give us some more color about your strategy for the ESG strategy of the group?

Okay. I will take the two first questions.

So for future awards, there will be some. There will be some in France.

There will be as well EuroAsia, which is a massive project to be awarded, has been delayed, but now fully financed, and that has been announced in the last 3 weeks. So we believe that EuroAsia will be certainly one of the top, top awards to come in the coming weeks.

We are well positioned. Only 2 companies have been specified and certified for this very complex project because we need to lay down the cable -- subsea cables at 3,000-meter depths.

So we are -- we hope and we are confident to get a part of this business. Regarding M&A strategy, of course, there is higher multiple, but there is a higher multiple on the sales side than as well on the buy side.

So we believe that -- we know we commit on the gap between what we divest and what we buy and to not be above 2. And we believe that we will be able to maintain that.

Some delays are possible, of course, because we are not eager being to buy at any price. And what we want to show you as well is the full potential that we still have in all business and specifically in electrification because we are still working on our numbers and specifically under SHIFT programs.

And we say, well, there is still a lot to bring. So any -- everything we are doing for Nexans, you can duplicate it after one acquisition will come because we will just replicate our SHIFT model.

So of course, these delays are possible. We will take a very sound decision, making sure that we are not jeopardize the level of debt on the cash of the company.

But the most important is really unlocking the full potential of the company. And believe me, we still have a lot to do in front of us.

Back on the CapEx?

So on the CapEx, Jean-Francois, yes, again, there's 2 parts in our CapEx for 2022. It's a very big CapEx year.

There's 2 parts to it. There is a traditional, I would say, maintenance CapEx to maintain the asset in condition and increase useful life of the asset, which are the maintenance CapEx.

So that's €150 million, 1-5-0 million euros. I would say in the normative spending we've done over the past few years, so that's a little bit below our depreciation number, I would say.

And then on top of that, for 2022, comes the engagement we took in February of '21 when we said that we will, you remember, increase by 2 additional lines of facility in Halden, where we said we will add 2 lines mainly to address the wind offshore market to be ready by 2024. And we have in our road map in the growth of our EBITDA the contribution from those new assets to the EBITDA of the group of €45 million in 2024.

We will start -- we started already a little bit the investment on those CapEx in '21, at the end of '21. The bulk part of those investment will come this year, and that's €160 million.

So when you add up the 2, the maintenance and the additional strategic CapEx for the 2 lines, you come with a number which is slightly above €310 million for the year 2022, which is, of course, the highest level of CapEx in a long time. But at the same time, it's the best time for us to do it because now we have the balance sheet.

We are prepared. We monitor that very effectively, which might not have been the case a few years back.

So the timing is good.

Yes. And we have to get ready by -- for 2024 because this is, based on our model, certainly the year where we will have a record of tendering activities for the next years to come.

You had a question, Jean-Francois, on ESG. So we have Olivier and Fatima to answer your question.

Olivier, I'll let you answer.

Thank you, Chris. So our ESG strategy was defined in 2020, in November 2020 during the road show, with some clear commitments by 2030 in order to improve, I would say, our circular economy, but also, of course, to contribute positively to the carbon neutrality by 2030.

And we have some key indicators that we are tracking in order to monitor the action plan and to deliver. During this presentation, you saw a great tool, a great movie.

And I will let Fatima explain it -- to explain the tool in order really to combine the financial and the environmental approach in order to really think about the return on carbon as a return on capital employed. Maybe, Fatima, if you can?

Yes. Thank you very much, Olivier.

Yes, as Olivier mentioned, this is a performance model. So we are taking care of our financials, of course, of our environment and of our people.

So the starting point was to start with the financials and the environment. And the idea was to take the advantage of all of the data that we have at group level, deep diving at the lowest level, meaning the customers, the suppliers, to work collaboratively with all of them in order to find the right solution to be able to deliver our target into -- for the environment, carbon neutrality in 2030.

And also, in order to keep our financials, our tool that we have developed and our solution is mainly deep diving in our data to get the insights and be able to do the right simulations with scenarios and to provide and share those -- the output of those scenarios with our management, but also with our customers and our vendors to work all together to improve and reach all together the targets.

Maybe we can thank our partners as well?

Yes, of course. We have worked actively with many of our partners.

From the technological point of view, it was Microsoft and Cosmo Tech. But also, we relied on our experts in environment transition, Carbon4, as well as Schneider that help us to deep-dive in our plans to find the, let's say, the solutions that we would like to monitor.

Yes.

So you see we are really data-driven. And I think this is very important for this topic in order to really show you milestone after milestone that we deliver our commitments.

Thank you. Thank you, everyone.

Thank you. I propose that we end with this environmental matters questions.

Thanks for your attention. Thanks for your trust in Nexans.

And stay tuned, still a lot to come for the full potential next year. Bye, bye.

Thank you. Bye, bye.

Thank you. Bye.