Nexans' SHIFT program improved results and share value
Cable manufacturer Nexans reports significant financial improvements and a share price increase thanks to its "SHIFT" transformation program. The initiative has generated over €111 million in incremental EBITDA.
Cable manufacturer Nexans has successfully implemented a transformation program named SHIFT. Between 2019 and 2021, the SHIFT PERFORMANCE component of the program exceeded its targets, generating over €111 million in incremental EBITDA and tripling the Return on Capital Employed (ROCE).
The program was initiated to identify the root causes of issues within the company and challenge existing ways of working. This led Nexans to categorize its portfolio, identifying segments as value burners, cash tanks, and profitable drivers. SHIFT PERFORMANCE focused on transforming value burners into profit drivers through portfolio selectivity, achieving results beyond initial expectations.
The SHIFT PRIME program, launched in 2022, aims to further enhance profitability by focusing on marketing, branding, customer understanding, and innovation. It targets an additional €40 million in incremental EBITDA by 2024 through new innovations, digital labs, and technology centers, addressing customer needs and promoting best practices globally.
These strategic changes have positively impacted the company's stock performance, with the share price increasing fivefold. Dividends have also risen, bringing the company's P/E multiple to a level consistent with its industry peers.