Nexans: Stock Story

Investors should consider the investment objectives, risks, charges and expenses carefully before investing. This information and other information about the Funds can be found in the prospectus and summary prospectus. For a prospectus and summary prospectus, please visit our website at bailliegifford.com/usmutualfunds Please carefully read the Fund's prospectus and related documents before investing. Securities are offered through Baillie Gifford Funds Services LLC, an affiliate of Baillie Gifford Overseas Ltd and a member of FINRA.

Tell us about the company 

Lucy Haddow: I'd like you to imagine the world 3,000 metres below sea level. The midnight zone of constant darkness. This is where Nexans, a French cable manufacturer, operates.

It's one of very few companies globally able to lay subsea cables at extreme depths. And the reason that this matters is because they're crucial for offshore wind and the energy transition.

What makes this stock special?

What makes Nexans special is that it's using its expertise in cable design and manufacturing that it has historically applied to automotive, mining and construction industries, amongst many others, to pivot its business and drive forward the energy transition. 

In particular, we're excited about the company's ability to A, shift to a potentially enormous opportunity in subsea electricity transmission. Globally, we are going to need to deploy more offshore wind capacity. And B, for the company to meet significant demand for sophisticated, specialized cables as electricity grids evolve. The reality is that this is an area in which many countries have chronically under-invested. 

So all of this, plus continuous investment in innovative products, contributes to Nexans’ being one of the very few go-to companies for state-of-the-art deep-sea projects. The barriers to entry are huge in this industry, given the need for consistent, reliable technology. Trust is key at 3,000 metres below sea level. 

What could the future hold?

We see a lot of potential for Nexans' future. Just recently, the company announced that an agreement between the Greek and Cypriot energy ministries on the Great Sea Interconnector project was being given the go-ahead. Nexans is going to supply the cables. Now, these are each going to have a length of 900 kilometres for what will be the largest and deepest subsea green electricity interconnector in the world. 

And what that will do is connect the power grids of Greece and Cyprus. So that's great in and of itself. But more importantly, it demonstrates that grid infrastructure projects are now getting the green light after a bit of hesitancy over the past few years around funding. 

This is a company that's primed for significant revenue and margin growth over the long term, as it doubles down on producing these sophisticated cables to support the long-term energy transition.

Risk factors

The Funds are distributed by Baillie Gifford Funds Services LLC. Baillie Gifford Funds Services LLC is registered as a broker-dealer with the SEC, a member of FINRA and is an affiliate of Baillie Gifford Overseas Limited. All information is sourced from Baillie Gifford & Co unless otherwise stated.

As with all mutual funds, the value of an investment in the Fund could decline, so you could lose money. International investing involves special risks, which include changes in currency rates, foreign taxation and differences in auditing standards and securities regulations, political uncertainty and greater volatility. These risks are even greater when investing in emerging markets. Security prices in emerging markets can be significantly more volatile than in the more developed nations of the world, reflecting the greater uncertainties of investing in less established markets and economies. Currency risk includes the risk that the foreign currencies in which a Fund’s investments are traded, in which a Fund receives income, or in which a Fund has taken a position, will decline in value relative to the U.S. dollar. Hedging against a decline in the value of currency does not eliminate fluctuations in the prices of portfolio securities or prevent losses if the prices of such securities decline. In addition, hedging a foreign currency can have a negative effect on performance if the U.S. dollar declines in value relative to that currency, or if the currency hedging is otherwise ineffective.

For more information about these and other risks of an investment in the Funds, see "Principal Investment Risks" and "Additional Investment Strategies" in the prospectus. There can be no assurance that the Funds will achieve their investment objectives.

This communication was produced and approved in April 2025 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking.

This communication contains information on investments which does not constitute independent research. Accordingly, it is not subject to the protections afforded to independent research and Baillie Gifford and its staff may have dealt in the investments concerned.

As at May, 2025, Baillie Gifford held Nexans. A full list of holdings is available on request and is subject to change.