Prysmian S.p.a. · MIL:PRY
Prysmian — H1 2014 Earnings Presentation
35 slides from Prysmian's earnings presentation, Jul 31, 2014
Slide 1: H1 2014 Financial Results
H1 2014 Financial Results Milan – July 31st, 2014 H1 2014 Financial Results 1
Slide 2: Agenda
AGENDA H1 2014 Highlights • Group overview • Results by business • Outlook Financial results Appendix H1 2014 Financial Results 2
Slide 3: Western Link: a strong recovery to properly address the production issue
Western Link: a strong recovery to properly address the production issue and minimize the economic impact Project Highlights WL production process Progress Status Stranding Turntable • Awarded in February 2012 to Prysmian- • Cable called back Siemens consortium from UK successfully • Customers: Nati
Slide 4: H1 2014 Key Financials
H1 2014 Key Financials Euro Millions, % on Sales Sales Adjusted EBITDA (1) Adjusted EBIT (2) Excl. WL Excl. WL Excl. WL -3.3%* sub.project sub.project sub.project effect 650 effect 494 effect 613 465 7,574 6,995 +1.3%* +3.4%* 3,504 282 278 208 207 3,358 3,287 204 133 2012 2013 H1'13 H1'14 H1'14 2012
Slide 5: H1 profitability slightly above previous year excl. Forex and WL
H1 profitability slightly above previous year excl. Forex and WL Gradual improvement in organic growth (despite soft Q2) mainly due to easier comparable basis in Q1 Organic Growth evolution Adj. EBITDA evolution % change on same period of previous year Euro million 140 292 7.4% 7.8% 282 2 14 4.5% 12
Slide 6: Ongoing volume recovery still not supported by pricing
Ongoing volume recovery still not supported by pricing H1 profitability impacted by lower pricing and negative currency. Limited effect expected in the coming quarters T&I Telecom Optical Volumes & CM/KG Volumes & CM/FKM CM / FKM (€/FKM) CM / KG (€/KG) Volumes (FKM) Volumes (tons) Stabilization of p
Slide 7: Production capacity rationalization
Production capacity rationalization Wuppertal (GER) Industrial cables - partial closure Eschweiler (GER) T&I/Industrial cables Angel (CHI) Hickory (US) Semi-finished products/wires Derby (UK) Industrial/control cables T&I cables Livorno Ferraris (ITA) Sant Vicenç (SPA) Telecom cables Industrial cabl
Slide 8: Agenda
AGENDA H1 2014 Highlights • Group overview • Results by business • Outlook Financial results Appendix H1 2014 Financial Results 8
Slide 9: Utilities
Utilities Euro Millions, % on Sales Sales to Third Parties Highlights DISTRIBUTION Excl. WL -1.4%* sub.project • Double digit organic decrease in H1 due to lower utilities capex across all effect 2,278 2,217 major geographies (Europe, North and South America). Still weak demand -2.2%* expected in th
Slide 10: Growing orders intake boosting backlog at peak level (€3bn)
Growing orders intake boosting backlog at peak level (€ 3bn) Record visibility in Submarine and good coverage for HV sales Transmission – Orders Backlog (€m) Transmission – Sales (€m) Submarine HV ~3,000 ~ 1,250 ~2,800 1.0x ~2,450 ~2,500 ~500 ~ 500 ~2,350 ~500 ~450 ~550 ~1,700 ~650 ~1,650 ~1,550 3.3
Slide 11: Trade & Installers
Trade & Installers Euro Millions, % on Sales Sales to Third Parties Highlights • Q2 confirms positive organic growth. H1 positive performance also -4.3%* attributable to weak comparable basis in H1’13. Europe remains the key 2,159 growth driver. 1,914 • Europe: on-going volume recovery from bottom l
Slide 12: Industrial
Industrial Euro Millions, % on Sales Sales to Third Parties Highlights +4.0%* Specialties & OEM 1) 1,801 1,764 • Lower sales due to continuous negative demand in Europe and decrease in Infrastructure investments in North America. Lower contribution of Mining, -0.3%* Infrastructure, Nuclear and Defen
Slide 13: Industrial: Unfavorable sales mix due to weak demand in high margin countries
Industrial Unfavorable sales mix due to weak demand in high margin countries H1 2014 Organic Growth by geographical area (Vs. H1 2013) H1’14 Sales - € million Main positive: +3% • Elevator Main negative: • OGP -6% • Nuclear • Renewables H1’14 • Infrastructure Org.growth • Mining H1’14 NORTH AMERICA
Slide 14: Telecom
Telecom Euro Millions, % on Sales Sales to Third Parties Highlights -15.4%* • Positive organic growth thanks to higher volume in optical offset by lower average pricing and continuous decline in Copper. Negative pricing and 1,202 forex effect on profitability partially offset by cost reduction 986 O
Slide 15: Agenda
AGENDA H1 2014 Highlights • Group overview • Results by business • Outlook Financial results Appendix H1 2014 Financial Results 15
Slide 16: 2014 Outlook – Confirming profitability increase Vs 2013 excl. Forex and WL
2014 Outlook – Confirming profitability increase Vs 2013 excl. Forex and WL despite still tough demand and pricing FY 2014 Adj.EBITDA Target Vs FY 2013 (€ 613 m) Initial expected Adj.EBITDA 600 650 FY Target - €94m Western Link FY 2014 effect Current Adj.EBITDA 506 556 FY Target H1 2014 H2 2014E • S
Slide 17: Agenda
AGENDA H1 2014 Highlights • Group overview • Results by business • Outlook Financial results Appendix H1 2014 Financial Results 17
Slide 18: Profit and Loss Statement
Profit and Loss Statement Euro Millions H1 2014 excl. WL Submarine WL submarine H1 2014 H1 2013 1) FY 2013 1) project effect project effect Sales 3,358 (71) 3,287 3,504 6,995 YoY total growth (4.2%) (6.2%) YoY organic growth 3.4% 1.3% Adj.EBITDA 278 (74) 204 282 613 % on sales 8.3% 6.2% 8.0% 8.8% No
Slide 19: Impact of currencies and WL project on Sales and Adj.EBITDA
Impact of currencies and WL project on Sales and Adj.EBITDA Profitability decrease fully attributable to WL project and negative currency translation effect Sales Adj. EBITDA Euro million Euro million Of which: Of which: • Utilities 35 • Utilities 2 • T&I 61 • T&I 4 • Industrial 49 • Industrial 5 •
Slide 20: Extraordinary Effects
Extraordinary Effects Euro Millions H1 2014 H1 2013 2) FY 2013 2) Antitrust investigation 32 1 6 Restructuring (7) (21) (50) Price adjustments 22 - - Other (7) (6) (6) EBITDA adjustments 40 (26) (50) Special items 3 (44) (47) Gain/(loss) on metal derivatives 6 (37) (8) Assets impairment - - (25) Oth
Slide 21: Financial Charges
Financial Charges Euro Millions H1 2014 H1 2013 2) FY 2013 2) Net interest expenses (42) (49) (100) of which non cash Conv.Bond interest exp. (4) (2) (6) Bank fees amortization (4) (5) (8) Gain/(loss) on exchange rates (4) (12) (27) Gain/(loss) on derivatives 1 ) (15) (11) (8) Non recurring effects
Slide 22: Statement of financial position (Balance Sheet)
Statement of financial position (Balance Sheet) Euro Millions 30 Jun 2014 30 Jun 2013 1) FY 2013 1) Net fixed assets 2,232 2,244 2,207 of which: intangible assets 587 597 588 of which: property, plants & equipment 1,415 1,435 1,390 Net working capital 751 696 386 of which: derivatives assets/(liabil
Slide 23: Cash Flow
Cash Flow Euro Millions H1 2014 H1 2013 1) FY 2013 1) Adj.EBITDA 204 282 613 Non recurring items 40 (26) (50) EBITDA 244 256 563 Net Change in provisions & others (75) (38) (76) Share of income from investments in op.activities (15) (14) (35) Cash flow from operations (before WC changes) 154 204 452
Slide 24: Agenda
AGENDA H1 2014 Highlights • Group overview • Results by business • Outlook Financial results Appendix H1 2014 Financial Results 24
Slide 25: Bridge Consolidated Sales
Bridge Consolidated Sales Euro Millions Total Consolidated 116 ( 71 ) ( 89 ) (173) - 3,504 Org. growth excl.WL Org. growth incl.WL 3,287 3,287 +3.4% +1.3% H1 2013 Org.Growth WL effect Metal Effect Exchange Rate H1 2014 L-f-L Perimeter effect H1 2014 Energy Cables & Systems Division 112 ( 71 ) ( 84 )
Slide 26: P&L Statement – Application of IFRS 10-11 Vs previous accounting
P&L Statement – Application of IFRS 10-11 Vs previous accounting Euro Millions H1 2013 H1 2013 FY 2013 FY 2013 FY 2012 FY 2012 Restated 1) Reported Restated 1) Reported Restated 1) Reported Sales 3,504 3,622 6,995 7,273 7,574 7,848 YoY total growth (7.7%) (7.3%) YoY organic growth (3.3%) (3.1%) Adj.
Slide 27: Stat. of fin. position (BS) – Application of IFRS 10-11 Vs previous accounting
Stat. of fin. position (BS) – Application of IFRS 10-11 Vs previous accounting Euro Millions 30 Jun ‘13 30 Jun ’13 31 Dec ‘13 31 Dec ’13 31 Dec ‘12 31 Dec ’12 Restated 1) Reported Restated 1) Reported Restated 1) Reported Net fixed assets 2,244 2,252 2,207 2,190 2,301 2,300 of which: intangible asse
Slide 28: Cash Flow – Application of IFRS 10-11 Vs previous accounting
Cash Flow – Application of IFRS 10-11 Vs previous accounting Euro Millions H1 2013 H1 2013 FY 2013 FY 2013 FY 2012 FY 2012 Restated 1) Reported Restated 1) Reported Restated 1) Reported Adj.EBITDA 282 282 613 612 650 647 Non recurring items (26) (26) (50) (50) (101) (101) EBITDA 256 256 563 562 549
Slide 29: Energy Segment – Profit and Loss Statement
Energy Segment – Profit and Loss Statement Euro Millions H1 2014 excl. WL Submarine WL submarine H1 2014 H1 2013 1) FY 2013 1) project effect project effect Sales to Third Parties 2,870 (71) 2,799 2,990 6,009 YoY total growth (4.0%) (6.4%) YoY organic growth 3.8% 1.4% Adj. EBITDA 235 (74) 161 232 50
Slide 30: Energy Segment – Sales and Profitability by business area
Energy Segment – Sales and Profitability by business area Euro Millions, % on Sales Total Organic H1 2014 H1 2013 1) growth growth Utilities 992 1,067 (7.0%) (2.2%) Sales to Third Parties Trade & Installers 944 974 (3.1%) 7.4% Industrial 817 895 (8.7%) (0.3%) Others 46 54 n.m. n.m. Total Energy 2,79
Slide 31: Telecom Segment – Profit and Loss Statement
Telecom Segment – Profit and Loss Statement Euro Millions H1 2014 H1 2013 1) FY 2013 1) Sales to Third Parties 488 514 986 YoY total growth (5.1%) YoY organic growth 0.8% Adj. EBITDA 43 50 106 % on sales 8.8% 9.8% 10.8% Adj. EBIT 22 29 63 % on sales 4.5% 5.6% 6.4% 1) Final restated figures in applic
Slide 32: Utilities – Major transmission projects to be awarded
Utilities – Major transmission projects to be awarded Main subsea and underground projects of pan-European significance List of main projects Main power flow trends 1. Italy – France Main subsea & underground projects in design & permitting 2. Germany (Borwin IV) Main planned subsea & underground pr
Slide 33: Telecom: Growth opportunities from broadband development in Europe
Telecom Growth opportunities coming from the development of broadband in Europe Evolution of NGA (Next Generation Access) Opportunities coming from national plans to coverage and high-speed (>30Mbps) / ultrafast achieve EU 2020 Digital Agenda targets (>100Mbps) take-up (% of homes) in the EU 100% Co
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 2,500 100 8,000 2,000 75 6,000 1,500 50 4,000 1,000 25 2,000 500 J-08 J-09 J-10 J-11 J-12 J-13 J-14 J-08 J-09 J-10 J-11 J-
Slide 35: Disclaimer
Disclaimer • The managers responsible for preparing the company's financial reports, A.Bott 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 in th