Ladies and gentlemen, good morning and welcome to Nexans First Quarter 2024 Financial Information Conference Call. As a reminder, this call is being recorded. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star 1 on your telephone keypad to register your question. If you require assistance at any point, please press star 0 and you will be connected to an operator. I would now like to turn the call over to your host for today's conference call, Mr. Christopher Guérin, Nexans CEO. Please go ahead, sir.
Thank you. Good morning, ladies and gentlemen. Thank you for participating to Nexans Conference Call. For this , here's Chris Guérin, CEO of Nexans. With me, Jean-Christophe Juillard, Deputy CEO and CFO, Nino Cusimano, General Counsel of the Group, and Élodie Robbe-Mouillot, VP Investor Relations. Let me turn over to Élodie for 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 URD, 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 highlights.
Thank you, Élodie. So if we jump straight to page 3, we can mention a pretty good start for the year for group sales organic growth of 2.8% year-over-year, pretty much an increase coming from the Electrification businesses that JC will comment. It's mainly from our Generation Transmission business linked to our capacity extension. In the course of quarter 1, we as well issue a new bond of EUR 350 million. You know that we have doubled our capacity in our flagship in Norway, Halden Plant, for the high-voltage business. We have been able to turn some firm orders into our backlog to reach EUR 6.7 billion as of today, but still a very, very, very strong pipeline ahead. We are fully loaded up to 2027 and get ready for potential new awards this year. Nothing new.
We already announced the acquisition of La Triveneta Cavi in Italy, worth EUR 800 million revenue. Maybe a quick jump on the next page, on page 4. Let me remind, it's a 700-people company. We took over this company at a multiple of 5.6x pre-synergy EBITDA, on 4.6x post-synergy EBITDA, financed by a mix of cash and debt. Maybe, as Nino, you're following this case every day, can you give an update to the audience regarding where we stand regarding the closing?
Sure. Thank you very much, Chris . Nino Cusimano. I think we can start with some good news on the process. As you know, it's subject to what we define customary closing conditions. The main two, the most significant two, are the antitrust and the Golden Power. We have received the Golden Power clearance, so we're halfway there. We are in line to get the full clearance from antitrust, and that's expected, as we have anticipated, towards the end of May, beginning of June. So everything is in order for an orderly closing, and we're all looking forward to that.
Thank you, Nino. In the meantime, all our integration team of 15 people is ready to move that into action. Thank you. Page 5. Nothing new from what we have announced, except that, of course, we are now running production of the new lines in Norway that has started in the last weeks. As we already mentioned, part of our strategic CapEx, we have launched the production of a third vessel. The name of the vessel will be Electra, following Aurora. On page 6, before I turn over to JC, very proud about this achievement. On the engagement part, we have done our Nexans Living Voice survey to all our employees in the group. We reached a record participation ratio of 90%, which is just fantastic. As you can see, the employment, sorry, the employee engagement rate, it keeps improving year-over-year.
We are making significant efforts at all levels of the company. My objective is to reach an 80% engagement rate by 2025. A last word regarding a new board of directors member. It will be Tamara de Gruyter. Tamara has very, very strong experience in the marine industry because she's president of the portfolio business of Wärtsilä. Wärtsilä is a global leader in energy storage and marine solutions. She's joining the board of directors of Nexans in coming months. Now, maybe JC comments regarding the sales.
Yes. Thank you, Chris. Page 7. So, as Chris highlighted at the beginning of the presentation, we had a good start of the year, organic growth for the group for Nexans, Q1 2024 versus Q1 2023, +2.8%. If you exclude, as we always communicate on that, the other activities, which mainly includes the metallurgy business, that you know we have the objective of reducing the external sales of that business. So if you exclude that decrease of the metallurgy business, the organic growth of the company for the of 2024 is 4.7%. Also, interesting to notice that if you compare the quarter to quarter, this is Q4 2023 versus Q1 2024, organic growth is +5.4%. When you look at the split, the breakdown of this organic growth, you see that we experience a very strong growth in the electrification businesses.
I will explain that on the coming slides, but very strong, 6.7%. I would say a flattish top line for the non-electrification business, +0.3% year-on-year. As I mentioned, a decrease of 8.2% after our strategy for the other activities. Turning to page 8 and having a look at the generation and transmission activities of Nexans, first of all, the backlog have reached, after the record level of December 2023, EUR 6.1 billion. Continue to see an expansion of our backlog, +10%, EUR 6.7 billion at the end of March 2024, again, mainly coming from different-sized small orders that are complementing existing contract in the backlog.
In terms of organic growth on the sales, +34%, it was expected, as we communicated, that beginning of the year 2024, the new extension of the two lines in our Halden facility in Norway would start production and execution of the record-high level backlog. So +34%, mainly coming from these two new lines in Halden. The rest of the activities in the G&T segment is progressing as planned. Moving to page 9, having a look on the distribution segment, that was one of the highlights, if you recall, of last year, very strong performance of the distribution business, both in terms of volume but also in terms of margin. We continue to see that very positive trend with a year-on-year increase, organic growth of +3%. If we look on a quarter-to-quarter basis, +1.8%.
So definitely driven by a strong, I would say, demand in Europe, where in other regions of the world was more stable, slight decrease in North America, in Canada for us. But Europe has been growing significantly, and this is the largest part of the distribution business of Nexans. Moving to page 10, looking at usages, we've seen normalization. I remind you that if you compare, so it's a -2% organic growth in usages, Q1 2024 versus Q1 2023. We had, in 2023, a normalization of the volumes, mainly North America for us. And that started mainly in the H2 of 2023. So when you compare the of 2024 versus a still very strong quarter of 2023, we continue to see that normalization that occurred during the Q3 and Q4 of last year.
Most of the decrease, again, is coming from North America. Europe has been slightly decreasing, but I would say more or less stable. Strong growth in other regions of the world, mainly Middle East and Asia. Looking also on a quarter-to-quarter basis, Q4 2023 versus Q1 2024, we see a +11% growth on usages. Now I'll turn to the last page of the presentation, page 11. With the good start of the year 2024, we confirm the guidance that we announced in February, beginning of the year, with an adjusted EBITDA of €670-€730 million and a normalized free cash flow ranging between €200 and €300 million. That will conclude yeah, that will conclude the presentation.
Again, the following slide on page 12 is, again, the confirmation that we'll have our next capital market day on November 13 in London, announcing the next equity story of Nexans for the next four years. Now, that being said, I turn now back the floor to operator and Chris for the Q&A.
Chat, thank you so much. Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad. Thank you. We'll now take our first question from Daniela Costa of Goldman Sachs. Your line is open. Please go ahead.
Hi. Good morning. Thanks for taking my question. Two questions from my end. So the first one, maybe just an update in terms of G&T, on two topics, actually. EuroAsia and sort of the situation in terms of timeline and when do you expect to start execution there, given some of the news flow we're seeing around the contract? And then more broadly, big tenders we should watch in 2024. And the second point, just an update on the divestment processes, if you could talk us through that. Thank you very much.
So we have started the production for EuroAsia based on the down payment that we receive at the end of 2023. But of course, it's not a full down payment. It's just a partial down payment. And we're expecting financial closings of all the terms by July. But of course, there was some recent news flow, which is not something that we mastered between Cyprus and Greece. Maybe, Nino, you want to comment?
Sure. Thank you, Chris. First of all, I'd like to say that, as Chris just mentioned, the project is very much operating. It's alive. Everything that we are doing on this project, the customary activities that we do on any project of this magnitude, of this nature, it's one of the largest projects, certainly the largest project we ever had. The activities, like I said, are the standard one. So we're meeting the client. As you know, we received the confirmatory deposit. All the activities are going as you would expect. We have also seen the news flow. So we are, like everyone else, we've seen the news flows. And those are, I would say, activities that you would expect, exchange that you would expect for a project of this, again, of this magnitude with this geopolitical footprint. So it's happening among our customer.
From our perspective, from what we're seeing on the business standpoint, activities are as normal as you would expect for a project of this nature. Nothing to report.
Regarding the second question, Daniela, on the divestment, a lot of progress has been achieved right now regarding the carve-out of our industry business, which is almost over. We will launch very, very soon, in coming weeks, the process of divestment. Nothing more to report on that.
Thank you. Regarding the key high-voltage tenders for 2024 that we should watch?
There are many, but I will not mention them because we are in a tendering activity. It's too early to say for the moment.
Okay. Thank you.
Thank you.
Thank you. We'll now take our next question from Alasdair Leslie with Bernstein. Your line is open. Please go ahead.
Oh, thank you. Good morning. Thanks. So maybe just first question on distribution. I mean, we're seeing a number of U.S. utilities really significantly hike CapEx plans. So I was just wondering maybe if you could expand a little bit on what you're seeing then in the European markets developments there, perhaps expand on how many more of these larger framework opportunities you see out there, similar to, I suppose, the agreement that you struck in Italy. And linked to that, I suppose, what do you think the real growth potential here is over the next five years? And I know you still include the reference to third-party forecasts there, around 4% growth to 2030. But I'd kind of be interested in how conservative you think that maybe now is and how much, I suppose, Nexans could potentially outperform that. Thank you.
Yeah. So regarding the utilities market, I think we were one of the top first companies to talk about it in 2021, that there will be a significant investment in that medium voltage area, supporting as well the development of high voltage. You have to take it as a complete value chain between high voltage, medium voltage, and low voltage. You cannot invest on one side of the value chain, not investing on the other side of the value chain. So I think the forecast could be a bit of 4% could be a bit, I would say, conservative. What we know, the recent study showed that the world needs to shift from 85 million kilometers of cables to 140 million kilometers of cable just because of urbanization demand and new emerging demand coming from different businesses.
But in the meantime, you need to replace potentially an equivalent of 40% of what is already installed. So yes, I think the 4%; it's conservative. Our equipment is fully saturated. We keep investing in that area. But growth doesn't mean systematically profit. So this is why we are extremely diligent and selective on the business, the type of customers, the type of product that we will inject in our process to make sure that we remain extremely productive in the output of production, but as well in terms of the lead time for our customers. But no magic, I would say, situation. It's what we say. We are entering in the hypercycle of demand for the electrification business. And that's only the beginning.
Excellent. Thank you. Could I ask a quick follow-up question, maybe, on the industrial solutions business? I've sort of some quite encouraging comments there about the divestment process. But maybe just on automation, I think you said at the last call that you were kind of sort of hoping to see a sort of second-half rebound in that business. Are you sort of still confident you can see that? Is that still your projection? And then just in terms of kind of potentially a divestment, in terms of where we stand in that cycle, any limiting factors, I suppose, across either automation or any of your other sort of businesses within industrial solutions that might just sort of be a limiting factor in terms of the timing of divestments? Thank you.
I think nothing will affect the time of divestment. There is plus and minus in that business. Shipbuilding industry containership is back to very, very high level of demand. We are fully booked there in parallel to cruise boat, unfortunately, for the planet, if I may say. On the second, our aerospace business is as well booming. We are the main suppliers of Airbus, and Airbus is benefiting from the difficulties of Boeing. But that's right. To go back to your first point on automation, we are still at a very low point of demand for automation, I think mainly driven by the difficulties of the automotive business. What is the projection for H2? Still too early to say. We don't see a strong rebound happen.
If you look at the VDMA Association latest report regarding the automation sector, they say that 2024 will be a transition year with a -2% overall for the European market. I think we are suffering from more than -2%. But we are talking about automation. We are talking about industry 4.0. So I think it's linked as well with the economic sentiment that we are potential recession on many companies, with the exception of electrification, have slowed down drastically their investment in the last six months. But I'm confident on the long run because everyone needs to renew its robots, its machines for the next 20 years. So I think it's just a temporary downturn of demand and positive of the rebound. Is the rebound happening in H2 or quarter one next year? I don't know yet.
Okay. Thank you very much.
Thank you.
Thank you. We'll now move on to our next question from Miguel Borrega with BNP Paribas Exane. Your line is open. Please go ahead.
Hi. Good morning, everyone. A couple of questions. In distribution first, obviously, you had those new framework agreements that are boosting your sales and profitability. Just want to understand how long these usually last, whether you think you will have more, and so any expected re-acceleration of growth. And maybe some color on why pricing of these new contracts is so much higher. Is it supply that is constrained? And why now? Because it doesn't seem that volumes are that much higher. Correct me if I'm wrong, but isn't pricing stronger versus a couple of years ago? And is it because of less competition or anything else? Just some color on the margins would be great. Thank you.
The color on the margin, you got it already, Miguel, at the full-year result 2023. A lot of analysts, not you, but considered it was, again, an exceptional year. My remark is the following: don't consider what is structural to be exceptional. It's structural. There is, of course, a very, very strong dynamic. All nations are waking up at the same time. Some nations have a very, I would say, less obsolete grid than others. But today, our growth cannot go faster than what our equipment can deliver. We are extremely selective, as I mentioned on the question before, on the type of customers, on the type of demand, the batch size of the order.
What I can tell you is that many frame agreements of that size, about 6,000-10,000 kilometers that we've signed in the last two years, the kilometers of cables have been consumed one year ahead before the end of the frame agreement. I think it's only the beginning. We have a lot of meetings with DSO right now talking about CapEx, more lines to be open to follow the demand. The market suffered from an overcapacity in that business from 2008 to, I would say, 2020. Now, it's changed completely. We have as well a lot of Turkish players that are close to bankruptcy, that are not part of the equation anymore. We don't see any emerging competitors from China arriving in that market.
So there is as well a question of lead time on the qualifications, quality of the product, where at least the European DSO play the European, I would say, game with their suppliers. And of course, it's just a price dynamic where you are fully saturated and you can choose your customers and your business. Of course, it's more high credit for the margin. But let me remind that for the last 10 years, these sectors have heavily suffered from low demand and low prices.
Thank you. Then secondly, on high voltage, can you detail what was the organic sales growth if we exclude the impact of the sale of Umbilical? And can we now assume that you're now on full capacity? So kind of to reach the full revenue capacity for the full year, I think you said last time about EUR 1.2 billion. And if we look beyond that, how do you see that EUR 1.2 billion without more capacity being added? Do you think you can do more? That's basically on higher prices.
Hello, regarding J.C., you want to?
So yeah, just to answer the question on Umbilical, it's very marginal. So Umbilical revenues are very small in the Q1 . So you won't make that much of a difference on the organic growth of the business. That's definitely no change.
Yeah. Yeah. Now, we will run on full capacity. But please keep your question regarding further advancement to the capital market there. I will not answer any questions that are linked to the next four years, the trajectory of the group. Miguel, sorry for that.
That's okay. And then if you allow me, one last question on M&A. If I recall, you presented a big M&A plan a few years ago. So far, you've done three key acquisitions, none of them in the U.S. So just wanted your thoughts, Chris. How do you think about the U.S.? Now, you don't have to say if you're going to buy or anything, but whether that is of interest or why haven't you done anything yet there? Is it a question of price or available assets? And it would be interesting getting your thoughts on what would be an expensive multiple for you in electrification, low and medium voltage? Thank you very much.
That's a good question. A tricky question, Miguel. Let me try to. Of course, North American market, it was part of our investment thesis. And it's a very attractive market, obviously, because it's the size of Europe, but only one norms of products. So the scalability of the offer is bringing, of course, a significant advantage. But it's as well, or it's a looking at me, it's good news, but there is a kind of consolidation already there in that market. There is a company, a fantastic company that unfortunately, the financial markets have no access. It's a company called Southwire, roughly a $12 billion company in the medium and low voltage businesses, doing great, being the key leader of that market. I would say, yes, we are always looking at that business, that geographical area, but not at the level of multiple that we have seen recently.
Of course, I know very well Encore Wire. I know very well Daniel Jones, the CEO of Encore Wire. He's one of the top CEOs of the sector, excuse me, fantastic, great leaders that know all the business by heart, specifically residential market, doing a lot of kind of SHIFT methodology that we are applying in Nexans. I would say sad to see that this leader will leave in the future. But I will not pay, of course. I'm not sure that GC, I'm looking at GC, that will allow me to make a check of $4 billion for a company in the US in low voltage. But into account that with the same amount, you can buy Nexans with a different level of synergy. But of course, we remain, I would say, attentive to what's going on in North America because we are present as well in Canada.
But we want to be extremely selective in the assets that we are buying. You have seen the range of multiple that we achieve in Italy. This is what we want to achieve with the others, not more. Okay.
We will now take our next question from Lucas Ferhani of Jefferies. Your line is open. Please go ahead.
Thank you. I just wanted to ask on an update on what is happening in offshore wind when it comes to the projects you are executing and the ones that are coming, and especially on Empire Wind? Thank you.
I would say we had a very, very strong news flow last year with negative and positive. So far, no major change from the latest announcement. Empire Wind 1 has been confirmed. We are working actively with the Equinor team. So I would say nothing new.
Perfect. Thank you.
Thank you. We'll now take our next question from Akash Gupta with J.P. Morgan. Your line is open. Please go ahead.
Yes. Hi. Good morning. And thanks for your time. I have a couple of questions as well. The first one I had was on La Triveneta Cavi. So thank you for giving us the EPS accretion in high single digit. I'm wondering if you can also comment about EBITDA contribution that we should expect, which you have assumed in this high single digit EPS accretion. And also for modeling purposes, this EUR 800 million is in current sales. What would be the corresponding number in constant metal price that you use for the business? So that's the first one to start with.
Yeah. Thank you, Akash. Good morning. Regarding the EBITDA, I'm sorry, I understand your question, but we cannot comment anything before closing. So we'll revert to you as soon as it's done. Regarding the shift from current sales to standard sales, you can consider that EUR 800 million of current is converting to EUR 630 million-EUR 650 million in standard with our standards.
Thank you. And the second one I have is on usages. So when I read your commentary by geographies, it sounds everywhere you have positive development with the exception of Canada where you were down 21%. So I'm wondering if you can give us, excluding Canada, what was the growth in the business? And when we look forward, when do you expect this decline in Canada to normalize? I mean, I think you said earlier that it's the middle of last year when this normalization happened. So is it fair to expect some sort of contraction, big contraction in Q2 as well before it is leveling out in the H2 of the year?
I would say contraction. I'm not sure. Reborn, neither. I think North American market right now is more at the low point. Of course, it's difficult to be precise because it's a mixed picture between the residential market, which is really down, versus commercial and industrial infrastructure that are up, as well as some data centers' demands that are encouraging there. But I think it's a low point. And we'll remain like that for Q2 from the perspective and the feedback that we receive from the key distributors present in that sector. Regarding the questions on your organic growth without US, our team is computing. Team?
We'll get back later in the call, but it should be positive without the normalization of Canada, but to be confirmed.
Zero plus.
Zero plus. Yeah.
Thank you. My final word is on copper price movement. In the last month or so, we have seen a big jump in copper prices. I'm just wondering how it may impact your free cash flow guidance because it might increase the value of your working capital as you need to do mark-to-market on copper. Is there a level where we may see some sort of risk, which is pure mechanical risk than anything else? Just wanted to talk about how shall we think about the impact of copper prices on your free cash flow guidance?
So we mean, as long as, I would say, the copper price does not go really above $11,000 a ton or $11,500, it will be meaningless in terms of impact to our working capital. We've reached already the 10,000 levels last year, and it was not that significant. You're right. It has a little bit of an impact, but you know that our working capital is so small right now. Working capital on sales is close to 0%. I mean, it's slightly positive. So it has a little bit of an impact, but it's not material. And we need to see a much higher level of pricing and prices before it really impacts our cash flow.
Well, I think it's a fundamental question for the long run, Akash, because now we can say from the information that we have from over there that the Chinese energy transition has started. We've seen a very high demand for copper supply in China those times that generate some ups on the copper price. That's only the beginning. I think the big topic will be in the next 2-3 years when copper price will be between $12,000-$14,000 per ton. Here, there will be, of course, an important impact on the free cash of the cable manufacturers because of the scarcity of supply versus very, very high demand. It's what we say since 2 years now, for 2 years. And that starts to be confirmed from the latest forecast.
I'm a bit concerned as well on the aluminum in different aspects because aluminum have less I would say I have more reserve in terms of capacity of extraction of the bauxite on the alumina. But the recent news of the European Commission to ban the aluminum of Russia, even if we have been able to divert our supply from Russia to different countries, will create a potential shock of supply in coming months. So the natural resources topic will be fundamental for the next years, both in terms of supply, but as well in terms of value that may impact the free cash of the cable manufacturer.
Just to rebound on the impact, the mark-to-market, so there's very limited, no impact on the cash flow at today's price level, as I mentioned earlier, where you will see an impact, though, like you said, on the mark-to-market in our P&L below EBITDA in our net income. Definitely, if copper price maintains at the level it is today towards the end of the quarter, the second quarter, definitely, when we do a mark-to-market in our half-year closing, it will have a positive impact on our net income.
Thank you. I'll go back in the queue now.
Thank you.
Thank you. We'll now move on to our next question from Luigi De Bellis with Equita SIM. Your line is open. Please go ahead.
Yes. Good morning to everybody. Two questions for me. The first one is on the generation and transmission. So can you elaborate on the expected improvement in sales EBITDA for full year 2024 if the +40% is confirmed, elaborating on the expected contribution of EuroAsia for 2024 and if the profitability trend as of today is in line with your initial expectations? The second question on the distribution and usages. So you are seeing a very encouraging trend considering the tough comp. So what is your outlook for the coming quarters for volumes and prices? And can you elaborate the trending margins as of today? Thank you.
Yes. I will take the first part of the question or the question which is related to the margin on G&T. So we remain on.
On the growth.
What's that?
On the growth of the sales. So definitely, the growth of the sale is happening because of the high backlog and the additional capacity. You see that in the . That will continue, obviously, through the end of the year. I remind you that, as you rightly mentioned, we have a 39%-40% top-line growth when you compare it forecasted for 2024 versus 2023 on that business. In terms of margin themselves, we continue to have the legacy project that, as I said, would be executed in 2024. It will exit the backlog by the end of the year, beginning of 2025, which means that in the first half of 2024, we will remain at the lower level of margin we've experienced in the H2 of 2023.
Then when EuroAsia or Great Connection, which is the new name of the contract now, is finally confirmed and signed, financial close being done, which is expected, as Chris said, sometime over the summer of this year, then we should basically recognize the margin, the revenue, and the margin on the contract, which is quite attractive, I would say, to the P&L of the business. Therefore, margin will go up. So this is basically the story that the way we foresee 2024 in margin evolution for that business. We have not changed our view since February.
Regarding the questions on medium voltage and low voltage, so medium voltage, I think we have very, very strong sales. The difficulties of our customers is access to labor to install the cable on making the junctions. But no concern on the medium voltage. I already extensively answered that question before. Regarding usages, we were ready for a big drop a few months ago because in case of recession, I would say that, first of all, different dynamic per region, a low point in North America that will be unchanged in the coming quarter, a strong rebound in Oceania, Asia-Pac overall. But in Europe, of course, we suffer of a lower volume but not as we could have expected in the case of a recession on the downturn. So we believe that 2024 will be, I would say, a potential mild recession in that sector, a bit better than expected.
But I'm remaining prudent, Luigi, because our visibility on the order book is limited. So we will be extremely, I would say, attentive of what the main players in that sector would say, like Legrand or Rexel, in their calls.
Thank you. If I may, just a very quick follow-up on the consolidation in the sector because we are seeing an acceleration from the market leader, from you. So do you expect an improvement in price dynamics in distribution and usages, generally speaking, as a result of this consolidation in Europe and in North America? Thank you.
I would like to answer, but my general counsel is looking at me with very dark, big eyes. So I think you have the question in your answers. But it's not only a matter of margin, Luigi. It's a matter of medium-sized companies start to have difficulties of access of raw materials, specifically copper, because they don't have the fire powers of procurement that the big names have. So that starts to be a big topic for them. The second big topic as well is the digitalization of the offer. We are very, very active on that demand at the request of our distributors like Sonepar, Rexel, and Wesco. And it requires a significant amount of investment both in materials but as well in terms of skills and competence. And that's what medium-sized player, family-owned business, I would say, have difficulties to cope with.
So this is why that I had the question recently. I said, "Yes, but there is a good trend in the electrification. So why selling?" I think it's what we saw with that Triveneta is access to copper, digitalization accelerations, new investment required to follow the demand. It could be a bottleneck for, I would say, this kind of company. And this is why that we need to be a bit stronger as cable suppliers. But we need as well to mention that our customers are getting bigger and bigger as well. So I would say we are just following the consolidation of the value chain in this specific part of the business.
Thank you very much.
Are you satisfied with my answer? Thank you, Luigi.
Thank you. Bye.
We are learning Italian, Luigi, and now.
Thank you. And we'll now take our next question from Bastien Agaud with Berenberg. Your line is open. Please go ahead.
Good morning, Bastien from Berenberg. Thank you for taking my question. You've experienced a double-digit growth sequentially in low voltage. Should we assume that it is coming from better pricing or higher volume for the whole division? Thank you.
Hello, Bastien. It's coming from both. You have a volume effect. You have a price effect. You have a mixed effect that contributes to this ratio.
Okay. Perfect. So we should assume that the end of the margin normalization that happened in H2 2023 should probably be over in H1 2024.
Sure. Confirm.
Okay. Thank you very much.
Thank you.
Thank you. We'll now take our next question from Éric Lemarié of CIC. Your line is open. Please go ahead.
Hi. Good morning. Thanks for taking my question. I got three. First, could you remind us the sales generated with fire safety cables today at Nexans, including with the Triveneta? And what could be your midterm objective there? I've got a second question on copper. You mentioned this issue, I think. But could you remind us the percentage of recycling copper used in your processes today? And again, what would be your objective? And a last question. I don't know if you can answer, but do you consider that you would need further strategic CapEx in the next years to deal with your current order book? Thank you.
Okay. Thank you, François. Regarding fire safety, there is in the Triveneta some part of fire safety, but I would say most of their production is in PVC cables. So that, of course, our aim is to shift to fire safety kind of polymers for a matter of premiumization. And that's part of our synergy roadmap. But I will give more detail in the Capital Market Day. So I don't want to go further in that topic. Regarding copper, we are close to 12%-14% of ability to use recycled copper in our output today. And today, we are working on making additional investment to turn this 12%-14% into a 50%, 50, in the coming years. And we will be able as well to offer to customers a new generation of cable that will be manufactured by 100% recycled copper and 100% recycled polymer.
That, for us, will give us a green advantage, if I may say it, versus competition. Regarding strategic CapEx, G.C., do you have other strategic CapEx in terms of demand?
No. No other strategic CapEx.
Not for the moment. Only the vessel, which is on the.
Yeah. Only the completion of the current vessel, which will be ready by 2026, where we still have about EUR 150 million of coming CapEx between this year and next year.
Okay. Okay. Thank you.
The last one.
Thank you. We'll have a next question from Jean-François Granjon with Oddo BHF. Your line is open. Please go ahead.
Foreign language. [crosstalk]
Yes. Thank you, Chris. Thank you. First question. Do you expect to integrate La Triveneta during the H2 this year after the closing? And do you confirm the accretive impact for the next six months? The second question concerns the installation business. You mentioned growth. Could you give us the % growth of this business during the ? My third question concerns the Usages business. You mentioned some value-added products. What is the % of high-value-added products currently on the Usages business? On my last question, regarding the high-voltage business, what is the % of the legacy or old contracts with some lower margin on the current backlog for the high-voltage? Thank you, Chris.
Thank you, Jean-François. So regarding the Triveneta, Nino, I booked my flight for June. So willing to get the keys. What can you say, Nino, specifically?
Like I said, the only obstacle right now where we are in closing is the clearance of the antitrust. Like I said, we're expecting that for the end of May, beginning of June. Everything is in line for an orderly closing after that.
So right now, what we've done in our forecasting, we have included revenues and margin contributions starting July 1st.
Okay. Regarding harnesses.
No, no, no. Wait, wait. Sorry. Wait, wait. There were four questions. So harnesses, gross ratio of harnesses for 2024? For Q1, yeah?
Gross ratio for Q1, it's slightly up. It's not to the magnitude of what we've seen in 2023, but 2% gross rate in harnesses for the Q1. .
Regarding usages, your third question regarding usages value-added. We are very active on what we call SHIFT Prime, which is a big work on premiumization of the product, shifting to fire safety, high brand product, plus as well, as I mentioned, digitalization. Once again, I don't want to elaborate more because that will be a cornerstone to our capital market day. And regarding the question was on the last question was about G&T. Do we have a sufficient capacity to run the backlog? The answer is yes.
I think the question was how much of legacy project do we have in the backlog?
pardon.
It's around 10%, 10%-12%.
Okay. Okay. Thank you.
Thank you.
Thank you. And now we'll take a follow-up question from Akash again from J.P. Morgan. Your line is open. Please go ahead.
Yes. Hi. Thanks for the follow-up. I had a clarification question to what Eric asked on G&T. So Chris, when I look at the statement, you say that you are fully loaded for 2027 and expecting potential award this year. When we look at the statement, you say you have strong visibility for manufacturing and installation extending through 2030. I'm just trying to get are you hinting that you are open for further increasing capacity as some of your peers are doing if you get the orders or you are not on that path and you want to basically utilize your existing resources and still note further capacity expansion? Thank you.
Yeah. I would take the because I had yesterday, when I was reviewing the material, I had the same comment. In fact, 2027, we have almost 100% of the revenue of the backlog today that takes us to the end of 2027. This is why we're saying fully booked until 2027. The visibility point is that we have some of the recent projects that we just booked into the backlog in 2023. That will take us through revenue recognition through 2030. This is why we talk about visibility through 2030 and about full booking until 2027. So we do have, indeed, capacity available starting 2027. And as we said earlier, as of today, except for the completion of the existing vessel, we are not planning on spending any further new CapEx, I would say, for capacity growth.
Thank you.
Thank you. I think it's ending now, the question session.
Yes. Thank you, David. No further questions, thank you. I will now hand it back to Christopher for closing remarks. Thank you.
No closing remarks. I wish you everyone a very great day and, I think, a very busy week with all the publication ongoing on. Thank you very much for your attention.
Thank you. Ladies and gentlemen, this concludes today's call. Thank you for your participation. Stay safe. You may now disconnect.