Prysmian S.p.a. · MIL:PRY
Prysmian — H1 2018 Earnings Presentation
35 slides from Prysmian's earnings presentation, Sep 18, 2018
Slide 1: H1 2018 Financial Results
H1 2018 FINANCIAL RESULTS Milan – September 18th, 2018 1
Slide 2: Agenda
AGENDA ➢H1 2018 Highlights o Group overview o Results by business o Outlook ➢Financial results ➢Appendix 2
Slide 3: H1 2018 Financial Highlights
H1 2018 Financial Highlights Organic sales growth at +2.0% (excluding General Cable) supported by: - High-single digit organic growth in Optical & Connectivity - Positive organic trend in T&I and Underground HV Fully combined organic sales growth at 2.7%, with General Cable organic growth at +4.4% d
Slide 4: H1 2018 Key Financials
H1 2018 Key Financials General Cable Euro Millions, % on Sales Prysmian excl. GC Sales (3)(6) Adjusted EBITDA (3)(4)(6) Reported(1) Full H1 Combined(2) Reported(1) Full H1 Combined(2) +2.7%* +2.0%* 5,782 5,660 477 4,364 1,722 1,799 413 381 339 113 7,904 736 99 25 3,938 3,983 3,938 3,983 364 314 364
Slide 5: H1 2018 Full Combined - General Cable Sales & Adj.EBITDA
H1 2018 Full Combined - General Cable Sales & Adj.EBITDA Euro Millions, % on Sales Sales (3)(8) Key Comments 3,449 • Positive volume trend mainly benefitting from Projects +4.4%* and Telecom growth in Europe and solid performance of Construction and Automotive in the US. 1,722 1,799 • Lower sales of
Slide 6: Prysmian performance by Segment (excl. General Cable)
Prysmian performance by Segment (excl. General Cable) Confirmed positive organic growth. Profitability expansion in Telecom business. H1’17 H1’18 Adj. EBITDA Margin 21.8% 17.2% 16.8% 8.3% 7.7% 9.2% 7.9% 7.4% 4.5% 3.6% 1.1% 1.9% Energy E&I Industrial & Oil&Gas Telecom Total Projects NWC. H1’17 H1’18
Slide 7: Adj.EBITDA Bridge H1 2017 – H1 2018 Full Combined
Adj.EBITDA Bridge H1 2017 – H1 2018 Full Combined General Cable Prysmian excl. GC Old Prysmian Perimeter General Cable Perimeter 477 ( 65 ) 41 ( 24 ) ( 16 ) 113 11 - ( 9 ) 413 ( 7 ) 5 12 427 412 422 413 405 405 410 411 411 Including €70m WesterLink Bad debt provision 99 provision Mainly related reve
Slide 8: General Cable Integration & Synergies
General Cable Integration & Synergies. Progress Update OPERATING SYNERGIES: FINANCIAL SYNERGIES: WORKING CAPITAL: • New organization announced 1 • 100% of Gross Debt of GC • Optimization of supply chain to week after closing. refinanced in the first 45 days capture synergies in stock levels. after c
Slide 9: Agenda
AGENDA ➢H1 2018 Highlights o Group overview o Results by business o Outlook ➢Financial results ➢Appendix 9
Slide 10: Energy Projects (Excluding General Cable)
Energy Projects (Excluding General Cable) Euro Millions, % on Sales Sales(6) Highlights SUBMARINE 1,493 • Adj.EBITDA impacted by €70m provision (€50m in Q2) related to the Western +1.8%* Link project. Shallow water cable repair completed on time; new land fault repair ongoing with the related econom
Slide 11: Energy & Infrastructure (Excluding General Cable)
Energy & Infrastructure (Excluding General Cable) Euro Millions, % on Sales Sales Highlights ** Sales excluding OCI TRADE & INSTALLERS 3,271 • Positive organic trend, improving in Q2 with volume recovery in North America +0.2%* and confirmed positive trend in Europe (mainly Germany, Netherland, Ital
Slide 12: Industrial & Network Components (Excluding General Cable)
Industrial & Network Components (Excluding General Cable) Euro Millions, % on Sales Sales Highlights Specialties, OEMs & Renewables • Sound organic growth, stabilizing in Q2, with continued sharp increase in +4.8%* Railways and Rolling Stock and recovery in Crane, partially offset by negative perfor
Slide 13: Telecom (Excluding General Cable)
Telecom (Excluding General Cable) Euro Millions, % on Sales Sales Highlights 1,258 • Adj.EBITDA margin growth supported by volume increase, manufacturing efficiency, footprint optimization and YOFC results. Adj.EBITDA also +4.4%* benefitted from the reversal in Q1 of a bad debt provision accrued in
Slide 14: General Cable by Geographical Area – H1 2018 Full Combined
General Cable by Geographical Area –H1 2018 Full Combined Euro Millions, % on Sales Sales (3)(8) Adj. EBITDA (3)(4)(8) Key Comments North America 2,039 149 +1.7%* • Volumes substantially in line with positive trend in Construction and Automotive 88 1,055 1,057 offset by negative performance of Utili
Slide 15: Agenda
AGENDA ➢H1 2018 Highlights o Group overview o Results by business o Outlook ➢Financial results ➢Appendix 15
Slide 16: FY 2018 Outlook Combined
FY 2018 Outlook Combined 2018 Adj.EBITDA Target (€ million) 2018 Adj.EBITDA Target Assumptions Full Combined(2) Reported(1) MID-POINT ASSUMPTIONS (Full Combined): • Volume and margin growth in Telecom, in line 680 700 720 680 700 720 with H1 trend. + + • Volume trend in E&I and Industrial in line wi
Slide 17: Agenda
AGENDA ➢H1 2018 Highlights o Group overview o Results by business o Outlook ➢Financial results ➢Appendix 17
Slide 18: Profit and Loss Statement
Profit and Loss Statement (1) H1 2017 H1 2018 Reported Euro Millions Reported of which Total Total General Cable Sales 4,364 381 3,938 YoY total growth 10.8% YoY organic growth 2.0% Adj.EBITDA 339 25 364 % on sales 7.8% 6.7% 9.2% Adjustments (46) (9) (31) EBITDA 293 16 333 % on sales 6.7% 4.4% 8.5%
Slide 19: Adjustments and Special Items on EBIT
Adjustments and Special Items on EBIT Euro Millions (1) (1) H1 2017 H1 2018 Reported Reported of which Total Total General Cable Non-recurring Items (Antitrust investigation) - - (15) Restructuring (14) (4) (9) Other Non-operating Income / (Expenses) (32) (5) (7) of which General Cable acquisition r
Slide 20: Financial Charges
Financial Charges Euro Millions H1 2018(1) H1 2017 (1) Reported Reported Net interest expenses (33) (34) of which non-cash conv.bond interest exp. (7) (8) Bank fees amortization (3) (2) Gain/(loss) on exchange rates (12) 2 Gain/(loss) on derivatives 3 (12) Non recurring effects (1) (1) Other non-ope
Slide 21: Statement of financial position (Balance Sheet)
Statement of financial position (Balance Sheet) Euro Millions (1) 30 June 2017 31 December 2017 30 June 2018 Reported Reported* Reported* of which General Total Total Total Cable Net fixed assets 4,571 1,913 2,599 2,610 of which: goodwill 1,905 1,466 441 438 of which: intangible assets 303 18 318 29
Slide 22: Cash Flow Reported
Cash Flow Reported Euro Millions 103 ( 283 ) 39 45 1,215 ( 293 ) 103 27 3,014 290 3,167 3,083 3,122 2,980 2,987 2,987 2,690 2,690 1,332 1,768 Including: • Acquisition cost • Transaction costs (€43m) 436 467* 436 € 13m Adverse FX Impact 31-Dec-17 GC GC Net Reported Working Capital Net Operative Finan
Slide 23: Agenda
AGENDA ➢H1 2018 Highlights o Group overview o Results by business o Outlook ➢Financial results ➢ Appendix 23
Slide 24: Bridge Consolidation Sales (excl. General Cable)
Bridge Consolidation Sales (excl. General Cable) Euro Millions Energy Projects E&I Industrial & NWC 6 43 ( 54 ) 12 ( 21 ) 131 ( 111 ) 36 3 Org.growth Org.growth 1.8% +4.2% 687 684 Org.growth 764 1,681 739 1,658 +0.2% Oil & Gas Telecom Total Consolidated (3) 9 7 1 ( 12 ) 28 ( 38 ) 205 ( 240 ) 381 80
Slide 25: Profit and Loss Statement
Profit and Loss Statement H1 2017 Euro Millions H1 2018 Reported (1) Reported of which Total Total General Cable Sales 4,364 381 3,938 YoY total growth 10.8% YoY organic growth 2.0% Adj.EBITDA 339 25 364 % on sales 7.8% 6.7% 9.2% of which share of net income 36 - 19 Adjustments (46) (9) (31) EBITDA
Slide 26: Cash Flow Statement
Cash Flow Statement H1 2018 (1) H1 2017 12 Months (from 1/7/2017 to Euro Millions Reported Reported** 30/6/2018) Reported ** Adj.EBITDA 339 364 708 Adjustments (46) (31) (88) EBITDA 293 333 620 Net Change in provisions & others 27 4 21 Share of income from investments in op.activities (36) (19) (59)
Slide 27: Energy Projects Segment – P&L Statement (Excl. General Cable)
Energy Projects Segment – P&L Statement (Excl. General Cable) Euro Millions H1 2018 H1 2017* Sales to Third Parties 684 687 YoY total growth (0.4%) YoY organic growth 1.8% Adj. EBITDA 50 118 % on sales 7.4% 17.2% Adj. EBIT 29 98 % on sales 4.2% 14.3% * Restated according to IFRS 15 27
Slide 28: Energy Products Segment – P&L Statement (Excl. General Cable)
Energy Products Segment – P&L Statement (Excl. General Cable) Euro Millions H1 2018 H1 2017 E&I 1,681 1,658 YoY total growth 1.3% YoY organic growth 0.2% Sales to Third Parties Industrial & Netw. Comp. 764 739 YoY total growth 3.4% YoY organic growth 4.8% Other 76 70 YoY total growth 8.4% YoY organi
Slide 29: Oil&Gas Segment – Profit and Loss Statement (Excl. General Cable)
Oil&Gas Segment – Profit and Loss Statement (Excl. General Cable) Euro Millions H1 2018 H1 2017 Sales to Third Parties 134 138 YoY total growth (3.1%) YoY organic growth 0.8% Adj. EBITDA 3 2 % on sales 1.9% 1.1% Adj. EBIT (2) (7) % on sales (1.7%) (5.1%) 29
Slide 30: Oil & Gas (Excluding General Cable)
Oil & Gas (Excluding General Cable) Euro Millions, % on Sales Sales Highlights SURF 273 • Umbilical: improved performance in Q2 after the negative start of the year +0.8%* thanks to a favourable project phasing. • DHT: volume growth driven by solid demand in North America (shale) and 138 Middle East
Slide 31: Telecom Segment – Profit and Loss Statement (Excl. General Cable)
Telecom Segment – Profit and Loss Statement (Excl. General Cable) Euro Millions H1 2018 H1 2017 Sales to Third Parties 645 646 YoY total growth (0.1%) YoY organic growth 4.4% Adj. EBITDA 141 109 % on sales 21.8% 16.8% Adj. EBIT 119 89 % on sales 18.4% 13.7% 31
Slide 32: General Cable Full Combined P&L H1 2018 by Geography
General Cable Full Combined P&L H1 2018 by Geography(2) Euro Millions H1 2018 H1 2017 Sales 1,057 1,055 North America YoY total growth 0.1% YoY organic growth 1.7% Adj.EBITDA 64 88 % on sales 6.1% 8.3% Sales 462 378 YoY total growth 22.2% Europe YoY organic growth 16.0% Adj.EBITDA 20 9 % on sales 4.
Slide 33: Notes
Notes (1) General Cable consolidated in the period 1 June 2018 – 30 June 2018; (2) General Cable included in the period 1 January – 30 June; General Cable figures are restated applying Prysmian accounting principles and policies; 2017 figures excludes General Cable “non-core“ perimeter already sold
Slide 34: Reference Scenario
Reference Scenario Commodities & Forex Brent Copper Aluminium Brent $/bbl Copper $/ton Aluminium $/ton Brent €/bbl Copper €/ton Aluminium €/ton 150 12,000 3,500 125 10,000 3,000 8,000 2,500 100 2,000 75 6,000 1,500 50 4,000 1,000 25 2,000 J- J- J- J- J- J- J- J- J- J- 500 J- J- J- J- J- J- J- J- J-
Slide 35: Disclaimer
Disclaimer • The managers responsible for preparing the company's financial reports, A.Brunetti and C.Soprano, declare, pursuant to paragraph 2 of Article 154-bis of the Consolidated Financial Act, that the accounting information contained in this presentation corresponds to the results documented i