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Nexans Investor Day Halden, June 25th 2013

Nexans Investor Day

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Introduction to High Voltage Submarine Managing a growing complexity

Dirk Steinbrink Executive VP High Voltage and Underwater Cables

Nexans Investor Day Where does complexity come from ? Customers are looking for increasingly higher transmission capacity

Customers are building longer and deeper interconnections Project scope of work has expanded in order to offer comprehensive interconnection solutions

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Nexans Investor Day Customers are looking for increasingly higher transmission capacity

Skagerrak 1

Skagerrak 2

Skagerrak 3

Skagerrak 4

1976

1976

1993

2014

Distance

130 km

130 km

130 km

140 km

Voltage

250 kV DC

250 kV DC

350 kV DC

525 kV DC

Power

250 MW

250 MW

500 MW

700 MW

Completion date

(*)

(*)

Expected completion date for Skagerrak 4

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Nexans Investor Day Longer and deeper interconnections The Italy-Montenegro interconnector 415 km of 500 kV HVDC cable (1 pole)

Down to 1200m

Growing demand for HVDC

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Nexans Investor Day HVDC: industry leading track record with above 3,000 km of cable experience Valhall (2010) 150kV DC IRC, 300km

Skagerrak 1&2 (1976) 250kV DC, 2x127km Norned (2008) 450kV DC, 2x158km

Vancouver Pole 1 (1969) 300kV DC, 3x33km

Estlink 2 (2013) 450kV DC IRC, 150km Cross Channel (1985) 270kV DC, 4x47km Scotland Ireland (2001) 250kV DC, 2x65km Spain Mallorca (2011) 250kV DC, 242km

Skagerrak 3 (1993) 350kV DC, 127km Fenno Skan 1 (1989) 400kV DC, 200km

Skagerrak 4 (2014) 525kV DC, 150km Fenno Skan 2 (2011) 500kV DC, 200km

Kontek (2010) 400kV DC, 50km Sardinia Italy (2010) 500kV DC IRC, 330km Gulf of Aqaba (1997) 400kV AC/DC, 4x13km

Hainan Guangdong (2009) 525kV AC/DC, 3x30km Korea Cheju (1993) 180kV DC, 102km

Spain Morocco (2005) 400kV AC/DC, 2x27km

Cook Strait (1991) 350kV DC, 3x40km In progress

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Scope of work includes a growing portion of “non cable” activities The Malta-Sicily interconnector Purpose is to build a 200 MW interconnector between Malta and Sicily to ensure environmental friendly and reliable power supply in Malta Approx 200 M€ turnkey contract awarded to Nexans in 2010 Comprehensive scope of work including:  submarine cable supply, laying and protection  land cables supply and installation  supply and commissioning of a power substation (Malta) Completion expected in 2014

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Nexans Investor Day The Malta-Sicily interconnector 101 km of 3x245 kV submarine cable manufactured in Halden Cable laying by C/S Nexans Skagerrak in two campaigns

Construction and supply of substation in Malta (subcontracted)

Land cable installation

Cable trenching by Nexans Capjet

Protection by rock-dumping in areas where trenching protection does not give the necessary protection Near shore protection by horizontal directional drilling and cast iron shells

Nexans Investor Day Nexans is ideally positioned to handle this growing complexity Industry leading track record in HVDC MI and HVAC Longstanding experience in complex cable laying and protection marine operations Strong reputation in turnkey projects

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Nexans Investor Day

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Submarine High Voltage An organization built for success

Kjetil Hovland Vice President Submarine High Voltage Business Line

Vincent Dessale Chief Operating Officer Submarine High Voltage Business Line

Nexans Investor Day Lessons learnt from 2012

Feeding in more machines and manpower to match market demand is not sufficient Coping with growing complexity and increasing timeline uncertainty requires highly structured organization, robust processes and right mindset

Combination of short-term containment measures and more structural long-term actions

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Nexans Investor Day The organization is being reinforced all along the project value chain

Engineering

Tendering

Installation

Manufacturing

Commissioning

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Tendering and engineering: preparing the ground for a smooth project execution

Selective bidding strategy Scaled up risk analysis at tendering stage Develop and implement risk mitigation actions before production starts Reinforce interfaces between engineering and production before, during and after production

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Manufacturing: implementing an organization focused on excellence (1/2)

Simplification of plant organization: rationalization and focus to secure the basics Process engineering: improve process control to maximize the utilization of the assets Supply chain: reinforce planning management to better anticipate planning adjustments and gain slack

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Manufacturing: implementing an organization focused on excellence (2/2)

Quality: split of quality and HSE functions to ensure stronger focus on manufacturing quality management Cost control: reinforced costing tools to ensure proactive tracking of costs

Nexans Investor Day Conclusion: an organization built for success

We have leveraged on the Group to attract the required talents to build a stronger Submarine organization Manufacturing has stabilized Project execution is gradually improving, supporting our objectives

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Nexans Investor Day

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Submarine High Voltage: Our ambitions

Frédéric Michelland Senior Executive VP High Voltage and Underwater Cables, North & South America

Nexans Investor Day A buoyant market…

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Nexans Investor Day

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Strong market drivers… Grid interconnection: above average growth in Europe driven by need for better balancing supply and offer in the European power market and attractive return for TSOs Offshore Wind: growing offshore wind capacity in Europe together with longer distances to shore O&G: growing demand worldwide for HV connections of offshore platforms

Nexans Investor Day HVDC: NOR.LINK project NOR.LINK  1,400 MW, +/- 500 kV  Two HVDC cables, turnkey  Delivery expected in 2018

   

Cable Landing in Vollesfjord, NO 514 km submarine cable route Cable Landing at Büsum, Schl.-Holstein , DE 55 km underground cable route in DE

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Offshore wind: Northwind project Belwind 2 Windfarm 165 MW

Supply of 245kV 3 core XLPE subsea cables:

53 turbines, 3MW each (Vestas)

-Cable 1: Belwind 2 to Northwind: 14km -Cable 2: Northwind to shore 42km With 2 FO elements 48 fibers in each cable

Northwind Windfarm 216 MW 72 turbines, 3MW each (Vestas)

Scope of works includes design, type-test, supply, and jointing termination works, cable witnessing and testing Completion scheduled in 2013 Largest cable ever manufactured in the world

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Nexans Investor Day Our ambition for submarine activities

Sales CAGR +7/8% (*) Double digit OM %

Sales ~600 M€

Cost optimization Low single digit OM %

Execution issue

H1’12

Stronger risk management Stronger organization Legacy contracts completion

Plant output stabilization phase (*)

including Hybrid Underwater Cables

Secured improvement phase

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Halden plant, processes & products

Bill Walsh Halden Plant Manager

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Early days

The Halden plant was built in 1974 to produce the first Skagerrak cable between Norway and Denmark

Halden plant, 1974

Nexans Investor Day The Halden plant today Nexans’ competence center for subsea cables, a turnkey supplier for customized solutions     

Engineering/design Type testing Manufacturing Land operations Marine operations

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Subsea power cables (paper insulated and XLPE), umbilicals and cables for Direct Electrical Heating

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High voltage laboratory

Factory area: 100,000m², running 365 d/y

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Nexans Investor Day Turn-key supplier 1. Engineering/Design

2. Type Testing

3. Production

4. Land installation

5. Marine installation

6. Protection

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Nexans Investor Day

Vancouver cable

High Voltage Paper Technology

 High Voltage submarine Interconnections, mainly used between countries and continents

Drawing

Conductor stranding

Paper lapping

Impregnation

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Nexans Investor Day XLPE cables

 HVAC Interconnections mainly used between windmill farms and connection point onshore

XLPE extrusion

Vertical lay-up

Armouring

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Nexans Investor Day Umbilicals and power umbilicals  Used for control and operation of subsea installations

Vertical lay-up

Steel tube welding

Storage

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Complete Test Facilities

Control room

Mechanical testing

High Voltage Test Laboratory for R&D, type testing, routine testing and final testing, several different labs

High Voltage Test Laboratory

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Complex Manufacturing

Turntables are used as a part of the production line, intermediate storages and final storages - a key element in the Halden plant

Producing cables up to 7,000 tons demands solid cable ways demanding a complex rigging activity or solid fixed cableways

Nexans Investor Day General HSE requirements  Please be aware of the nearest emergency exit  In case of fire alarm, follow your Nexans contact to the nearest meeting point  Hard hats, protective shoes and safety glasses are mandatory in the factory  Visitor must wear red reflective shirts  Visitors with pace maker not allowed inside the plant due to the magnetic fields  No picture allowed  Do not stray from the assigned area

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Submarine installation

Anders Røren Marine Installation Manager

Nexans Investor Day Installing cables around the globe

Different climates Different conditions

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Nexans Investor Day Turn-key projects: more than manufacturing • Seabed mapping • Feasibility study

• Engineering

• Route design

• Risk management • Planning Cable protection (against fishing activities, currents, etc.)

• Load-out • Transport

• Jetting

• Laying

• Trenching

• Shore landing

• Rock Dumping • Near Shore

• Onshore civil works

Additional services

• Onshore cable pulling

• Cable Repair

• Cable end terminations

• Cable & Umbilical transport

• Jointing

• Factory support

Nexans Investor Day Installing the cable Load-out at factory Transport to site Shore landing operations (pull-in) Platform pull-in Cable laying

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Nexans Capjet 1MW

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Cable burial into seabed by use of water jetting principle

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Can be used on cables, umbilicals, rigid and flexible pipelines

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Burial depth more than 2,5m into seabed in favourable soil conditions

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Water depth more than 1000m

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Can also be used for dredging (e.g. uncovering buried cable)

Nexans owns and operates 3 complete CAPJET systems with dedicated Launch & Recovery Systems (LARS)