Hello, and welcome to the Nexans 2021 full year financial results call. My name is Josh, and I will be your coordinator for today's event. Please note this conference is being recorded, and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you'll be connected to an operator. I'll now hand you over to your host to begin today's conference. Thank you.
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. Good morning, Aurélia, Head of Investor Relations and Elodie Robbe-Mouillot , Nexans Investor Relations. Let me turn now to Aurélia, 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, Aurélia. Before we go over the highlights and deep dive into our business overview and our key financials to end with our 2022 outlook, we wanted to share and to show you a very quick video that sums up this last three years equity story and achievement. Let's play the video.
1879, Edison invented the light bulb. As a sign of fate, Nexans' adventure started the same year. For over a century, Nexans has played a crucial role in the electrification of the planet and has committed to electrify the future. In a world of continuous change, Nexans successfully anticipates, innovates, and reinvents itself, turning crisis into opportunities.
The world is waking up, and change is coming whether you like it or not.
Even if the younger generation seek to unite to face climate change while other alliances are breaking, even though days are going to be more difficult across the whole planet, Nexans has been able to write a new lasting page in its history.
Our ambition is to contribute in shaping the world of tomorrow. We are Nexans.
Nexans wants to change and imagine SHIFT program, a new approach to transform a company faster, enabling to double cash generation at constant revenues and costs. When the world stopped suddenly as the COVID-19 epidemic broke out, Nexans managed to overcome the crisis with a unique approach, learning from the past to imagine how to face the unprecedented situation, turning adversity into opportunity. Nexans is making its ambition happen with a new purpose, new values, and a new ambition to electrify the future. Nexans commits to making this sustainable vision of the future real, innovating and reinventing the way to monitor the energy transition, considering new usages.
In a rapidly changing world impacted by mega trends and mega risks, Nexans intends to refocus on its core business and become a pure electrification player covering the electrification value chain from the generation of electricity through carbon-free energies to its transmission, distribution, up to its usage. Nexans is investing into new infrastructures as the Aurora vessel to enable new countries' submarine interconnections, opening a new plant in Charleston, USA, to connect major offshore wind farms to the grid.
This is good news for South Carolina. It's good news for our domestic offshore wind industry, and it's good news for the United States of America.
Investing in Halden, Norway, to follow new sustainable energy transition projects. A new time for a better future with a second climate day held in Stockholm. In 2021, after this successful turnaround, Nexans is powering ahead to electrification. From 2022 to 2024, our new Winds of Change equity story will allow us to unlock Nexans' full potential.
[Non-English content] . 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 page six, 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 like our EBITDA margin, up to 157 basis points at 7.6% on sales. You know, it's always the constant message.
It's all about selectivity. It's all about value growth focus. It's all about supply chain on price effectiveness. For reminder, cable player pass through 100% of the metal price increase to customers. On this cost represent close to 60% of our total cost. Our annual income upturn at EUR 164 million for 2021 was for sure supported by copper price inflation, but most of all, by our operational outperformance, enabling us to propose EUR 1.2 dividend per share, which is up 71% versus last year. On that, we have to mention 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 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 on a new record low net debt at EUR 74 million. The new Nexans, the 2019-2021 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 strategy CapEx 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.
We reach EUR 2.2 billion, which is up 59% versus last year. You know, it's not a race for volume. It's important to recall that our focus at Nexans is all about selectivity. It's all about value growth. In our backlog, specifically in subsea, is really based on solid track record, a 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 strategy condition to become an electrification pure player. First, as I told you, we will simplify our businesses to amplify our impact.
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. Antitrust is pending, but we are confident in closing the acquisition in the first half of 2022. We are also, 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. This is an improvement on our SHIFT Performance model, but now really focus 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 its three or four critical KPIs.
First, outstanding EBITDA. We are above the range, EUR 463 million. The guidance were between EUR 430 million-EUR 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 EUR 169 million. The guidance were between EUR 100 million-EUR 150 million. You know, we will share a video about our E3 systematic model that goes a bit beyond financial KPIs, in bridging financial performance on environmental and social performance.
We are proud as well to be on track on several of our ESG commitments, notably ISO 45001 certification that now covers almost 89 sites, and it will be close to 100 very soon. 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 commitments. Now, Jean-Christophe will dive deeper into our financial performance. Slide eight.
Thank you, Chris. As you can see on this page, since 2018, our three major KPIs have been growing steadily. If I start with EBITDA, we went from EUR 325 million in 2018 to EUR 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 - 2021, we have more than tripled our cash flow generation from EUR 54 million to EUR 179 million. How did we achieve this successful turnaround? Chris will show you that on page nine.
How we did it? Yes, that's the key question, JC. You know, let's bring on the page here some graph on that you already seen in the last years. We have to really being clear. Nexans successful transformation is mostly due to our powerful in-house program called SHIFT. SHIFT, you know, is encompassing every type on best practices coming from the private equity world. I spent more than 10 years working on it. Now what you can see on page nine 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 units that now represent 87% of our sales coming in and now declared as profit drivers, where those units as confirmed as profit drivers in 2018 were only worth less than 52% of our total revenue. The portion of value burners or transformation candidates keeps reducing and shrinking every year. Second, of course, is our SHIFT program. Let me remind you that our SHIFT program is nothing about restoration. It's not about fixed costs. It's really 25 levers of transformation to really reset the software of a company to find a new economic model. Let me show you on the graph what you have on the right side on the graph. This 17 units fully deployed, what was their evolution in terms of EBITDA?
You can see that they have started at EUR 80 million, total EBITDA, and two years later, they are reaching EUR 170 million. What is important to notice is that constant sales. It is to show you as well that organic growth does not mean systematically higher profit. It's a 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 two for those units the working capital in last two years. As a sum up, return capital employed for those units has been multiplied by three in three years. It's only 17 units. We keep working on unlocking the full potential of the group.
SHIFT Performance is really the recipe, the unique recipe of Nexans' successful turnaround of the last three years. Also for the next three 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, 2018 - 2021. Nexans transformation program is due to a systematic 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 EUR 500 million, which include IFRS 16, which is including IFRS 16 led to EUR 530 million.
Our initial target were to improve EBITDA by EUR 55 million for value growth, EUR 210 million for cost reduction, EUR 100 million via SHIFT, taking into account an estimated -EUR 190 million price cost squeeze on labor inflation. An end total of EUR 175 million. As you can see, we exceeded that by EUR 30 million, reaching a EUR 205 million EBITDA incremental improvement in three years. On all the levers of the plan have outperformed. JC, 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 three years from 2019 - 2021. 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 EUR 138 million to reach EUR 463 million compared to the EUR 500 million of the plan. As I explained, we will reach that in 2022.
Return capital employed 16.4%, nothing to say, but very significantly above the target of 15.5%. Free cash flow, we took the commitment, if you recall, to generate EUR 200 million of free cash flow during the three years of the plan. We achieved EUR 361 million, 80% above the target. A very significant improvement in terms of free cash flow.
Yeah. Now I propose that we jump into our business overview. If we jump to slide 13, this is an overview of the group operational performance, which, as mentioned earlier, was strong across all our businesses. Overall, sales were up 8%, 8.3% organically, from EUR 5.7 billion in 2020 to EUR 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 two new strategic CapEx being fully operational in Q4. Of course, project phasing like we explained to you during the last quarters. We will come back to that later in more details. Just a quick outlook if we stay on this slide across our geography.
South America was dynamic through the year, up 17%. Africa and Middle East up 11%. In North America, in line with what we have over there, 8%. Europe, 6%. Asia Pacific, slightly negative, -2% with some slowdown in, specifically in China. 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 two 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 EUR 2.2 billion, evidencing our unique risk-reward model and our leadership on best positioning ourselves on key projects such as Empire Wind, Taiwan Links, Moray West, without forgetting the now full-fledged 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 EUR 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.
Once again, the backlog is linked with very high value on low execution risk project. Along these lines and in our new strategic plan, we have initiated investment in the Halden expansion plan, like you already mentioned, above EUR 200 million. That is now starting in 2022. On page 15, let's go on page 15 on Building & Territories. I'd like to spend one minute there because, you know, I know that I'm challenged on organic growth, and we are not guiding organic growth. Once again, here you can see on the graph the full power of SHIFT Performance and the selectivity on cross-product customers and really to focus on our platinum customers against pure volumes on more customers on more SKUs. Why you can see that?
Because we have generated an organic growth of only 3%, I will say a shy organic growth, but the EBITDA has been up 46% at iso fixed cost. That's the full power of the SHIFT program. 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. We will continue our premiumization effort to really turn this commodity business into a top premium market thanks to this SHIFT Performance model and SHIFT Prime. You can see it's across all value geographies. Demands have been very, quite dynamic. Our process is running 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. 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. As well, 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.
Now, last on, it's a word on our Industrial Solution and Telecom and Data. First, Industrial Solution performance was robust through the year, boosted by Automotive Harnesses and as well Automation. Our EBITDA, as you can see, is up 42% over the year, and margin is growing from 6.9% to 8.7%. Auto Harnesses activity was particularly strong in H1, you know, 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 good news. Now Q1 2022 is running full-fledged. Automation is solid sales. We're supported by very strong demand in Europe. As well, transport, aerospace continues to recover from COVID-19.
There is only a rolling stock that's challenging a bit because of the slowdown in demand in Asia, specifically China. Second, Telecom and Data. EBITDA margin improvement over the year was also quite solid, reaching 11.5% in 2021 against 7.5%. All activities demonstrate sound performance. On that second, so I think it's running well. We have to be careful regarding the backlog. The special telecom, submarine telecom business had a very huge backlog in 2020. Now we consume it in 2021. Now we have a normalized backlog. That's the reason that you see a very slight slowdown on the backlog. Now let me hand over to JC, and JC will go back to the details of the financials.
Thank you, Chris. If we start with our basically performance on EBITDA, you see that EBITDA has been growing very significantly against last year, 33%. You can see on this bridge, on this slide, that all of our business group, all of our businesses have strongly contributed to this EUR 124 million improvement. If we look at the P&L and we start with the sales, a little bit over EUR 6 billion, up 8.3% in terms of organic growth or growth, a nice recovery versus 2020 negative organic growth due to COVID.
I would highlight a strong demand, positive mix price management from the company in 2021 and, of course, the high voltage end of the year hump up, in line with project saving and the new full potential of the new asset, mainly in the U.S. EBITDA outperformance at EUR 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 to EUR 299 million versus EUR 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 EUR 338 million in the year against EUR 246 million in 2020. Of course, we have to notice the core exposure impact of EUR 106 million this year, boosted by the copper price increase during the 12 months of 2021. The reorganization cost at the same time dropped to EUR 58 million, against EUR 107 million .
It includes some reorganization costs linked to the group transformation in itself and also some write-off following our plant in the U.S., Chester. Net income lands at a positive EUR 164 million for the full year 2020, against EUR 80 million for 2020, and includes net financial expenses of EUR 101 million versus EUR 54 million last year, in 2020, sorry, mainly related to the impairment of some financial investment, notably 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 six months now, at the growth of the progress on our EBITDA when we look at the different levels, pillars of our equity story.
If we look down 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: EUR 50 million of cost reduction in the year 2020, EUR 35 million from SHIFT deployment across our units in the year, and a EUR 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 EUR 61 million of inflation and price cost squeeze. You see that we have recovery from last year.
We estimate at EUR 56 million, which is additional volume coming from 2020 COVID-19 impact, and that obviously also support the improvement of the EBITDA. 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 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 ten-year low level at EUR 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 amount to EUR 389 million. We continue to have an improvement in our working capital, EUR 111 million. All together, we generated EUR 179 million of cash generation above our target, despite, I would say, still EUR 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 and in 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 two additional line in Halden. Altogether, we spent about EUR 80 million on strategic CapEx, explaining the EUR 206 million I would say of total CapEx spend in the year 2021.
We had also financial interest, and those have been reducing because we have made in early 2021 some debt repayment. We had the PGE, the French state loan. We had also an expensive bond of EUR 250 million we repaid. We, by the repayment of those bond, we reduced our interest charge by about EUR 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 years and how it demonstrate 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 maintained our working capital on sales ratio at a historically low level of about 4%. 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 EUR 100 million, EUR 110 million for the year.
We continue to believe that 4% is a very low level, but we commit to stay below 6%-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 got the news, the confirmation that Standard & Poor's upgraded Nexans rating to BB+. This-
Oh. Oh.
Thank you. This is a very nice news for us. 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. From last year, obviously, the increase is quite significant.
You can see on our two 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 EUR 1 billion, EUR 972 million, cash on the balance sheet.
We have our untapped revolving credit facility for EUR 600 million and the new facility that we announced a few months ago from the European Investment Bank for EUR 200 million, which is undrawn, giving us a total liquidity level of EUR 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, JC. Now, 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, the 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. We need to put all the three pillars, economic, environment, and engagement, under a new systematic model. Our manager requires today to face those new objective on 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 working and is fully launched in 2022, I ask Olivier Chevreau, our VP Sustainability, and as well Fatima working with him regarding all data analytics, to introduce a movie on how the tool is working. Let's have a very quick video of two minutes to explain it.
Our teams imagined, designed, and deliver a new performance tool to establish the roadmap for a sustainable Nexans. We are able to measure 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 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 clustering, and the CO2 emissions for each individual unit. 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 a scenario changing transport mode for customers located more than 1,000 km away from our plants. We replaced gas oil trucks by compressed natural gas trucks 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 series. A tool to reinvent our decision process bridging 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. 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. There was nothing, you know, existing on the market. We have decided to making our own, develop our own tool, and it's, believe me, it's very, very powerful. Let's go now to page 26, and after we will end this presentation with the guidance. 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, you know, moving our product into smart solution from passive to active components.
As demonstrated, this innovation cover the four key steps of the entire value chain, from the purchase to the inventory, to the delivery, up to the geo-localization of the assets. 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. Our 2022 guidance, excluding acquisition and divestment, is our commitment to generate an EBITDA ex- between EUR 500 million-EUR 540 million.
The free cash flow expected to be in the range of EUR 150 million-EUR 200 million, reflecting the additional strategic CapEx to be deployed in 2023 in high voltage for the two additional lines in Halden. That's the reason that we are as well talking about normalized free cash flow. I'm sure that you will have question, and JC 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. In line with our 2022 and 2024 roadmap, we are no longer providing a return on capital employed guidance.
Last but not least, as mentioned in the introduction, we will propose to the General Assembly a EUR 1.2 dividend per share, which represents a record for Nexans, 71% up versus last year, EUR 0.7 per share dividend. We thank you for your time. We are ready for Q&A session. It's 9:45 A.M. Floor is yours. Thank you.
We do have some questions coming through, and the first question comes from the line of Max Yates from Credit Suisse. Please go ahead.
Morning, everyone.
Good morning.
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 level can continue as we go into 2022? 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 buildings and territories from here within electrification?
Thank you, Max, for the question. I will take the answer to the question. The first part of the question was to the level of the margin of high voltage. Definitely we talked about that, if you recall, in our Q3 results presentation, where we had in Q3, I would say a low level in terms of sales and margin for high voltage. We were 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. The margin also improved significantly.
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 two vessels doing installation at a high level of installation. 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, is 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. I am confident that 2022 will be at the level of what we've seen at the end of 2021. That's the first thing. The second question was regarding 2024 and our margin 2024.
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. 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 two years. The quality of the backlog I described also give us some good levels that at least we will be in the target or potentially better in 2024 when it comes to high voltage. 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. Also, you know, 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. We are with what we are announcing in Q4, very well in starting very well this improvement roadmap, I would say.
All right. Okay. Thank you. Maybe just a sort of quick follow-up on sort of what you're seeing in the offshore wind industry. 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 Saipem have profit warned recently. I just wanted to understand how do you protect yourself against delays in other parts of the value chain. 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?
Well, 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 six months, it's potentially a delay of two years because we need to keep running all the others.
Today, the time we speak, Max, we don't encounter any delays or a delay can be a one-month, but nothing material. We are very positive for the year to come.
All right. Good to hear. Thank you very much, guys.
Thank you, Max.
Thank you, Max.
Thank you. Our next question comes from the line of George Featherstone from Bank of America. Please go ahead.
Hi. Morning, everyone. Thanks for taking my questions. 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? Also, does this improved leverage ratio mean that we're more likely to see an acquisition near term than we are a disposal?
Thank you for the question. Definitely, when we prepared our equity story, our CMD, and we looked at 2024, we communicated already, I communicated already on the deleveraging of the balance sheet with the cash flow generation. We are completely with 2021 ending completely in line with this through this deleveraging. We have, like you said, almost debt-free balance sheet. It gives us a lot of firepower. We estimate to be about EUR 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 about EUR 2 billion of firepower 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 progressing well in that direction. Like Chris said in the presentation, this year, 2022, we are reasonably confident that we will announce a divestment. With the level of the multiples today, we believe we will sell very well the assets.
That we can count on an additional, we estimated at the time, and I can confirm that, about EUR 1 billion of additional, I would say, firepower to deploy our, to do acquisition with the proceeds from the divestiture. 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. I would say that we announced Centelsa a few months ago. We should be closing that in the coming months. As I said, the divestment will be in about the same timeframe in 2022. We are well progressing on that, and we are compliant, I would say, with what we announced in February.
Thanks very much. 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 demands actually translating into extra projects for Nexans?
George, I will take the question. Yes, of course, there is a huge stimulus in U.S. with Long Island Voltage Corridor, for example. We believe that some will start right now, but some will be postponed. You know, in general, for the world, we are not worried at all. I think, as a matter of fact, we need to sequence a bit the things because you know, all countries wants everything at the same time. All countries wants to shift their generation of electricity from fossil fuels to carbon-free energy. All countries wants to renew their aging power grid. You know, those assets are aging more than 50 years. Every country wants to electrify their cars.
You know, the problem is that it will generate a huge bottleneck at the cable level, but as well on the copper level. 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 1900 - 1920 or 1950 - 1970. 20 years of massive investment for the generation of electricity on 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. We need to massively invest in the infrastructures.
You know, some countries may have some delays, but there will be always other countries or other demand that will always compensate. 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.
Thanks very much.
Thank you, George.
Thank you. Questions are also being accepted through the webcast, and I will hand over to, Aurélia for the webcast questions.
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?
Yeah, I can do that. Centelsa is about EUR 230 million sale of business, and EBITDA margin at 10%. Obviously this is pre-synergy numbers. We will, when we acquire the business, develop and implement our methodology of SHIFT that has shown in the numbers of 2021 the very good, I would say, power to improve. Therefore, we are quite confident with the synergy and the SHIFT deployment that we will boost the margin of the business.
Yeah, that's very important because we want to demonstrate through the improvement our own financial result on this, the fact that we 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 two to three years. Yes, it will be very accretive.
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. 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. Organic growth is also a lot due to market and environment, and 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. I would say that what is important to say, and I will not give you exact percentage because again, this is not the purpose of how we build our guidance.
Definitely there will be growth in high voltage in 2022 because we have now new assets. They come into operation at the end of 2021, and they will be fully operational in 2022. 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 percent on Building & Territories for sure. There will be potentially a little bit more growth than the average on Telecom and Data because it has been a little bit slow in 2021.
Following the COVID of 2020, 2021 has been a little bit slow in the ramp-up on telecom, and we have been a little bit behind. We expect a little bit higher than the average growth for the group, a little bit higher in Telecom and Data. At the same time we say that we will start to reduce our metallurgy. Don't forget that metallurgy was a quite significant sales contributor to Nexans over the past years, about EUR 1 billion. It's quite dilutive. You recall that the margin of this business is around 1.5%, EBIT on sales.
Our strategy, as we announced it for 2024, is to serve ourselves first, limit basically external sales on that business, and therefore there will be a contraction, a reduction of sales on this business that will start moderately in 2022 as part of our strategy. You will have a little bit of negative organic growth coming from that segment. All together, I would say that between 3%-5% total organic growth for the group is what we targeted for 2022. Again, with some up and some down, as I described. This is not where we are betting for our midpoint target for EBITDA.
Yes, let me add as well, that is a constant debate that we have with some analysts regarding organic growth. 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 circular product or means recycled raw materials that we use for our organic growth. I think we need to specify what is organic growth. That's the reason that really I focus the team on the entire Nexans on generating value. SHIFT program, again, demonstrate to 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 capital employed. After when you really have segmented clearly your product and your customer portfolio, which is considered platinum for the company, then you can grow. Before, you need to make sure that your portfolio is made of good cholesterol, and as well, good customers and good product. 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, EUR 500 million-EUR 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?
The range is EUR 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 mid-year like we've done in the last year and the year before with a narrowed and hopefully improved guidance rather than you know be in a situation where as you know last year was still the aftermath of COVID. We still have a little bit of uncertainty when it comes to COVID. There are other geopolitical situation in the world. Right now we feel more comfortable with the range. We are very comfortable to achieve this guidance obviously.
We are, I would say, in a position if things move as planned to deliver some good news in mid-year.
Specifically, we can add that we have this cleanup of customers and product portfolio. You have seen that our backlog in all business is pretty robust for the beginning of the year.
Yeah, exactly. For the inflation, again, the question is about 70%-75% of our total cost is pass-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 logistics, 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. The transportation logistics is not that significant. Wages and salaries is definitely subject to potential inflation in 2022. It is about 7%-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.
For the Harnesses business.
Mainly for the Harnesses, yeah, for the Harnesses business, exactly. If we see the level of inflation that we've seen in the second part of 2021, and that continues to 2022, that will not be a problem or cause material issues to our guidance.
To absorb it.
We can manage it, yes.
Next question.
Thank you very much. We do have some more questions on the phone. The next question comes from the line of Sean McLoughlin from HSBC. Please go ahead.
Thank you. Good morning. Can I just dig a little bit into the others? It was quite a large loss in the second half, EUR 80 million. Just to understand what's going on there and how we should think about that in 2022.
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 costs 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, the corporate center. But,
The incentive plan also.
Some incentive plans also, but that's about it. It has nothing operational, I would say.
Thank you. I mean, can I ask you then on Centelsa, the synergy targets, 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 will say, purchasing cost allocations as well, specialization of the units because we are already one unit. We are number three in Colombia. So we can better specialize the production assets. The biggest potential is what you see in B&T worlds of Nexans today, is the SHIFT Performance on the premiumization of our offer. You can see this development of B&T business over the last years, specifically the building, which is a very impressive trend. That's all this dynamic on full potential way of doing that we will implement into Centelsa.
Thank you. If I can just do a slightly broader question. I mean, thinking about general overall valuation levels in the market being quite high, would still appear that we are in a kind of a seller's market. I mean, is a further acquisition dependent on a sale at this point despite the increased buying power?
No. An acquisition, further acquisition is not dependent on the sales. I mean, if an acquisition that makes a lot of sense for strategy comes up tomorrow, we will do the acquisition tomorrow. I mean, we are diligently working in our plan. Again, I mean, we have the flexibility on the balance sheet to even do full acquisition before we can do divestment if we wanted to. This is not the aim and the objective, but we could do that. 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.
Thank you.
Next question.
Our next question comes from the line of Poppy Boyd-Taylor from Goldman Sachs. Please go ahead.
Hi there, thanks for taking my question. The first question that I wanted to ask is just on the dividend per share. We noted 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 a norm going forward?
Yeah, this is definitely 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.
It does well demonstrate our very positive outlook of the development of our business on the full potential of Nexans.
Okay, great. Thank you. Another couple of questions quickly. Do you have any perspective on the backlog excluding contracts which are not yet fully secured and how that's changed year on year? If you'd give a quick update on the German cartel investigation, if you've heard anything more there, that'd be really useful.
The first question?
I missed it.
I missed the first question, Poppy.
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. Yeah. Basically, the backlog is about EUR 500 million less, so it's about EUR 1.7 billion.
Well, yeah. Regarding the German cartel, Nino.
Yes.
Good morning.
Yeah.
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. Just to put things into perspective, our business in Germany is a EUR 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. It's an investigation on what they call the DEL-Notiz, which is an index. There's many indexes in many industries. 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 already, and those were cleared already. We are not concerned.
We'll work with the authorities. We're doing our own consideration or investigation, but this really doesn't concern us too much.
Okay, great. Thanks so much for the clarification there.
You're welcome.
Thank you, Poppy. Do you have another question?
Yes. Our next question is from the webcast. Aurélia, please go ahead.
Thank you. We have a question from Cyril Charlot from Sycomore. What will be the real CapEx in 2022 versus normalized?
Okay. The real CapEx for 2022 is EUR 150 million. The total CapEx will be EUR 360 million. The difference being obviously the strategic CapEx and the investment we are making into our two additional lines for offshore wind in Halden, Norway, as part of what we communicated in February 2021 during our CMD. Clearly, the bulk of the CapEx for the strategic is coming this year. Therefore, impacting CapEx and cash flow, obviously.
Next question.
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 2022? This portfolio reshaping both disposals and acquisitions.
Well, Matteo, what we say now is that we have started by an acquisition. This is the one of Centelsa after we are going through antitrust process. 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 on that. The next announcement of the group is a disposal of a large activity. After we back into the sequence of acquisition, of course, you know we are not starting from zero. There is pretty engaged discussions with potential companies, and we'll come back to you in due time. We will respect this sequence. Next.
Yes. Matteo also has a question on the high voltage backlog. Are you still prioritizing submarine versus land high voltage and keeping a selective approach on tendering? What about pricing and high voltage?
Yeah, of course. I think we had those questions hundreds of times in the last years. My answer is look at the EBITDA ratio on sales, 18%. We have now tools in managing subsea and land business that were not there before. It's not a simple tools, it's about financial modelizations, technological modelization, planning modelization. It's a very impressive model that we've put in place, and that really help our team collectively. Those decisions are taking at 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. We classify all the project, more than hundreds.
We have a focus on 10 of them for the next to come, where we say, "This is the one to win." I will not tell you which one, because my competitors is always screening every words of Nexans. The team is focused on those one. 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. Our teams before lack modelization, lack decision process supported by data analytics. This is really where we put full power to take the right decision for our future. That's back to the question of Max. Yes, we are confident on the constant level of improvement of EBITDA ratio on our high voltage business.
Sometimes you can see that in terms of margin yields or 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. It's not true all the time.
Next question.
Thank you. Thank you very much. Our next question comes from the line of Akash Gupta from JP Morgan. Please go ahead.
Yes. Hi, good morning, everybody, and thanks for your time. My first one is clarification on CapEx guidance. Jean-Christophe, so you mentioned EUR 150 million normal and total is EUR 360 million. Can you confirm that number? And then also, if you can provide a bridge from EBITDA guidance of EUR 500 million-EUR 540 million to EUR 150 million-EUR 200 million free cash flow, particularly what you have baked in for working capital movement. That's question number one.
Yeah. Sorry, maybe I didn't speak clearly. It's not EUR 360 million. The total CapEx is EUR 316 million. Sorry, EUR 315 million. EUR 315 million. Out of that, you have about EUR 163 million, which are the strategic CapEx, and about EUR 150 million, which are the normal maintenance CapEx of the group. That's basically what comes up with our CapEx story. 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 about the EBITDA guidance, EUR 500 million-EUR 540 million, and what is in terms of cash flow? 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 2022, starting 2022. 2024, where we talk about normalized cash conversion rate, if you remember, where we committed that we will be above 40%. From this first year, I would say 2022 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 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.
The second thing we said is we now talk about, I would say, a normalized free cash flow. What is normalized free cash flow? It's the cash flow of the group, as we reported in the past, adjusted for three elements. The first one is the strategic CapEx, the second one is the material PP divestment.
Tangible asset divestment if we had to have some. The last one is a normalization of the taxes in Norway. You know, Norway has a quite, I would say, different tax regime where basically you pay your taxes on your profit when the project 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. That's the three element 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 EUR 50 million.
Thank you. That is very clear. My second question is on inflation and price-cost squeeze. We had EUR 61 million in 2021, EUR 55 million in 2020. What have you embedded in your 2022 guidance of EUR 500 million-EUR 540 million? I would assume you have included some price increase to offset this inflation situation. Maybe you can comment on pricing and how confident you are to offset some of these headwinds through better pricing. Thank you.
Yes. EUR 61 million in 2021, it's made of, typically, you know, about EUR 30 million of pure inflation mainly on salaries and inflation on wages, and about EUR 30 million of price pressure and material price increase. That's basically the rough split of the EUR 61 million, which is quite consistent with what we've seen over the past two years. You remember our equity story was saying EUR 190 million for three years, which is roughly EUR 65 million per year for the three years. We did EUR 61 million in 2021. That's basically in the bulk part.
What we see, we took a little bit, I would say, higher level in 2022 because we believe that inflation will probably remain a little bit longer through the year to the higher level of the end of 2021. We're running, I would say, about EUR 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.
Yeah, we have now a new bucket that 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. 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 as well, more marketing. Of course, that implies premiumization, and that implies higher margin.
Thank you, Akash.
Thank you.
Thank you. Next question.
Okay, thank you very much. Our next question comes from the line of Jean-François Granjon from ODDO. Please go ahead.
Yes, good morning to you also. It's a four-part question. Nevertheless, three other questions, please. The first one concerns the future awards. Could you give us some more color on what you expect for the next awards for the coming months? The second question, could you comment on the M&A strategy and what you expect for the coming months, and due to the fact that probably the acquisition make some acquisition with higher price, the ratio of the acquisition go up. Are there any risks to see some delay for your next acquisition due to the fact that they need some more money?
Just, I don't understand what you mentioned about the CapEx for 2022. Could you come back on that? The last question, could you give us some more color over your strategy for the ESG strategy of the group? Thank you.
Okay. I will take the two first questions. For future awards, there will be some in France. There will be, as well, EuroAsia, you know, which is a massive project to be awarded. It has been delayed, but now fully financed. That has been announced in the last three weeks. We believe that EuroAsia will be certainly one of the top awards to come in the coming weeks. We are well positioned. You know, only two companies have been specified and certified for this very complex project because we need to lay down the subsea cables at 3,000 m depths.
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 higher multiple on the sales side and as well on the buy side. We believe that we know we commit on the gap between what we divest and what we buy and to not be above two. We believe that we will be able to maintain that. Some delays are possible, of course, because we are not eager to buy, you know, at any price.
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 around our SHIFT programs. We say, "Well, there is still a lot to bring." You know, everything we are doing for Nexans, you can duplicate it after one acquisition will come. Because we will just replicate our SHIFT model. 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. The most important is security. The most important is really unlocking the full potential of the company.
Believe me, we still have a lot to do in front of us. Back on the CapEx please.
On the CapEx, Jean-François, yes. Again, there are two parts in our CapEx for 2022. It's a very big CapEx year. There are two 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. That's EUR 150 million. I would say in the normative spending we've done over the past few years, that's a little bit below our depreciation number, I would say.
On top of that, for 2022, comes the engagement we took in February of 2021 when we said that we will, you remember, increase by two additional lines our facility in Halden, where we said we will add two lines mainly to address the wind offshore market. To be ready by 2024. We have in our roadmap in the growth of our EBITDA, a contribution from those new assets to EBIT of the group of EUR 45 million in 2024. We started already a little bit the investment on those CapEx in 2021, at the end of 2021. The bulk part of those investment will come this year, and that's EUR 160 million.
When you add up the two, the maintenance and the additional strategic CapEx for the two line, you come with a number which is slightly above EUR 310 million for the year 2022, which is, of course, the highest level of CapEx in a long time. 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. The timing is good.
Yeah. We have to get ready for 2024 because this is, based on our models, certainly the year where we will have a record of tendering activities for the next years to come. You had a question, Jean-François, on the AG. We have Olivier and Fatima to answer your question, Olivier. I let you answer.
Thank you, Chris . Our ESG strategy was defined in 2020, in November 2020 during the roadshow, 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. 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 performance model. We are taking care of our financials, of course, of our environment and of our people. The starting point was to start with the financials and the environment. The idea was to take the advantage on all the data that we have at group level, deep dive in 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 targets into for the environment, carbon, and neutrality in 2030. 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, Carbone 4, as well as Schneider that help us to deep dive in our plants to find the solution that we would like to monitor.
Yeah.
You think 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 very much.
Thank you. I propose that we end with this on environmental matters questions. Thanks for your attention. Thanks for your trust in Nexans. Still stay tuned. Still a lot to come for the full potential next year. Bye-bye.