Prysmian S.p.a. · MIL:PRY
Prysmian — FY2019 Earnings Presentation
41 slides from Prysmian's earnings presentation, Mar 5, 2020
Slide 1: FY 2019 Financial Results
FY 2019 Financial Results MILAN – March 5th, 2020
Slide 2: Agenda
Agenda FY 2019 Financial Appendix Highlights Results Group overview Energy Transition Outlook 2
Slide 3: 2019 Key Achievements
2019 Key Achievements Proposed FCF Adj. EBITDA Dividend STRONG • Free Cash Flow above 2019 Guidance, with 1,007 €M Adj. EBITDA 433 1,007 0.50 CASH GENERATION € million € million euro per share • Proposal to increase dividend 2019 Target (ex-IFRS 16): 2019 Target (ex-IFRS 16): 300 ±10% €0.43 last yea
Slide 4: 2019 Financial Highlights
2019 Financial Highlights Adj. EBITDA at 1,007 €M (8.7% of sales) vs 767 €M in 2018 (6.7% of sales), mainly driven by: • Energy: solid trend in E&I, particularly in North America and LatAm. Overall positive trend for Industrial & NWC, except Automotive Adj. EBITDA • Projects: FY results (ex WL) decl
Slide 5: 2019 Financial Highlights | Euro Millions, % on Sales
2019 Financial Highlights | Euro Millions, % on Sales Sales (1)(4) Adjusted EBITDA (1)(2) -0.9%* 1,007 11,523 11,519 47 IFRS 16 effect 767 960 6.7% 8.7% FY 2018 FY 2019 FY 2018 FY 2019 COMBINED COMBINED Reported Operative Net Working Capital (3)(4) Reported Net Financial Debt 2,140 749 2,222 707 169
Slide 6: Adj. EBITDA by Segment
Adj. EBITDA by Segment | Euro Millions, % on Sales, excluding IFRS 16 impact PROJECTS ENERGY TELECOM Sales Organic growth -5.8%* Sales Organic growth 0.0% Sales Organic growth 0.4% 0.7% -1.7% Adj. Ebitda / % on sales 288 295 265 267 244 221 221 202 235 172 184 100 5.7% 12.0% 14.1% 12.0% 12.5% 3.8% 5
Slide 7: Sales & Adj. EBITDA by Geography
Sales & Adj. EBITDA by Geography | Euro Millions, % on Sales, excluding IFRS 16 impact EMEA NORTH AMERICA LATIN AMERICA ASIA PACIFIC TOTAL -2.4%* +2.6% +0.7% -4.5% -0.9%* 6,196 3,441 931 951 11,519 Sales -1.3% +1.9% +2.0% -1.4% 0.0% 513 932 960 467 165 338 165 242 Adj. Ebitda 348 97 76 101 58 5.6% 7
Slide 8: Overperforming on Synergies
Overperforming on Synergies | Anticipating synergies in 2019. Confirmed 175 €M target SYNERGIES PLAN 2018-21 ~ 175 ~ 155 ~ 140 ~ 120 Management & staff Procurement ~ 35 Industrial footprint Other 2018 2019 2019 2020 TARGET 2021 ACTUAL TARGET ACTUAL TARGET Implementation costs on track Cumulative one
Slide 9: Agenda
Agenda FY 2019 Financial Appendix Highlights Results Group overview Energy Transition Outlook 9
Slide 10: Energy Transition | Focus on German HV projects
Energy Transition | Focus on German HV projects SuedOstLink ▪ Client: TenneT TSO GmbH & 50Hertz 1,100 km cable Transmission GmbH 5 lots ▪ Type of cable: 525 kV XLPE or P-Laser ▪ Completion date: December 2025 SuedLink ▪ Client: TenneT TSO GmbH & TransnetBW 2,750 km cable GmbH 4 lots ▪ Type of cable:
Slide 11: Energy Transition | Offshore wind success story
Energy Transition | Offshore wind success story Market evolution: the long term perspective Prysmian a clear beneficiary and enabler of energy transition As the cost of offshore wind has declined, installations have soared From GW installed to € million cable value 1• 1 GW of offshore wind requires:
Slide 12: Innovating in a Rapidly Changing World
Innovating in a Rapidly Changing World | Enabling Energy Transition & Digitalization 1 PUSHING BOUNDARIES OF UHVDC 2 GOING DEEPER INTO THE SEA WITH LONGER LENGTHS 1st high depth submarine cable with synthetic armor Industry first to qualify both 525kV XLPE and P Laser solutions Crete-Peloponnese und
Slide 13: Agenda
Agenda FY 2019 Financial Appendix Highlights Results Group overview Energy Transition Outlook 13
Slide 14: 2020 Outlook affected by short term uncertainty
2020 Outlook affected by short term uncertainty 2020 Adj. EBITDA target (€M) FCF target (€M) (*) TARGET 950 1,020 FCF before acquisition & disposals ~ 330 ±10% Including restructuring & integration cash out of ~ 85 Projects Energy Telecom Improving trend with financial Continued growth in North Decl
Slide 15: Update on COVID-19
Update on COVID-19 | The Highest Safety and Monitoring procedures Prysmian has implemented the highest Safety and Monitoring standard to manage and control the development of COVID-19. Mitigation actions promptly put in place to safeguarde Group employees: • Strong increase in sanitary and hygienic
Slide 16: Agenda
Agenda FY 2019 Financial Appendix Highlights Results Group overview Energy Transition Outlook 16
Slide 17: Profit and Loss Statement
Profit and Loss Statement | Euro Millions 2019 2018 total of which IFRS 16 combined reported (4) SALES 11,519 11,523 10,104 YoY total growth combined (0.0%) YoY organic growth * (0.9%) Adj. EBITDA Bridge Adj.EBITDA 1,007 47 767 693 Q1 Q2 Q3 Q4 FY % on sales 8.7% 6.7% 6.9% of which share of net incom
Slide 18: Adjustments and Special Items on EBIT
Adjustments and Special Items on EBIT | Euro Millions 2019 2018 reported Non-recurring Items (Antitrust investigation) 32 (94) Restructuring (85) (66) Other Non-operating Income / (Expenses) (47) (32) EBITDA adjustments (100) (192) Special items (20) (59) Gain/(loss) on metal derivatives 15 (48) Ass
Slide 19: Financial Charges
Financial Charges | Euro Millions 2019 2018 reported Net interest expenses (88) (79) of which non-cash conv.bond interest exp. (10) (12) Financial costs IFRS 16 (5) n.a. Bank fees amortization (7) (8) Gain/(loss) on exchange rates (33) (11) Gain/(loss) on derivatives 9 (5) Non recurring effects (2)
Slide 20: Statement of financial position (Balance Sheet)
Statement of financial position (Balance Sheet) | Euro Millions 31 Dec 19 31 Dec 18 (4) Net fixed assets 5,301 5,101 of which: goodwill 1,590 1,571 of which: IFRS 16 effect 167 n.a Net working capital 755 692 of which: derivatives assets/(liabilities) 6 (15) of which: Operative Net working capital 7
Slide 21: Cash Flow
Cash Flow | Euro Millions +433 €M Free Cash Flow ( 955 ) 211 21 111 (9) 119 94 248 95 75 ( 92 ) 2,222 2,140 1,908 31-Dec-18 Cash flow WC WL Restruct & Net Financial Paid Dividend Dividend IFRS 16 Other 31-Dec-19 operations changes impact integration Operative Charges income received paid (before WC
Slide 22: Dividend Proposal
Dividend Proposal | Dividend proposed to the forthcoming Shareholders’ Meeting at April 28th Dividend Yield (1) Date Dividend per share 0.50 Ex-dividend date: 18 May 2020 euro per share 2.7% Record date: 19 May 2020 Payment date: 20 May 2020 DPS evolution (Euro per share) Draka acquisition 0.50 0.41
Slide 23: Agenda
Agenda FY 2019 Financial Appendix Highlights Results Group overview Energy Transition Outlook 23
Slide 24: Performance by Segment
Performance by Segment | Euro Millions, % on Sales, excluding IFRS 16 impact 2018 2019 18.0% 16.2% Adj. EBITDA Margin 12.0% 5.7% 6.8% 7.4% 6.7% 8.3% 3.8% 5.5% 14.4%* 14.8%* Project E&I Industrial & NWC. Telecom Total 2018 2019 ±X.X% = Sales Organic Trend Adj. EBITDA (€M) / % Org. Growth -0.9% (1) 96
Slide 25: Projects
Projects | Euro Millions, % on Sales, excluding IFRS 16 impact SALES HIGHLIGHTS -5.8%* SUBMARINE • Strong recovery in Q4 as expected • Adj. EBITDA margin –ex WL- impacted by operational reworks and project phasing • Operations strengthening: flawless execution in 2019 • Tendering activity ongoing, w
Slide 26: Energy & Infrastructure
Energy & Infrastructure | Euro Millions, % on Sales, excluding IFRS 16 impact SALES (5) HIGHLIGHTS +0.7%* TRADE & INSTALLERS • Negative organic growth driven by EMEA partially offset by APAC • Profitability improvement in North America and Latin America POWER DISTRIBUTION 5,318 5,285 • Sound growth,
Slide 27: Industrial & Network Components
Industrial & Network Components | Euro Millions, % on Sales, excluding IFRS 16 impact SALES (5) HIGHLIGHTS -1.7%* SPECIALTIES, OEMS & RENEWABLES • Positive O&M and renewables, especially in Latin America and North America, supported by clear Management approach • Positive trend in Mining, Marine and
Slide 28: Telecom
Telecom | Euro Millions, % on Sales, excluding IFRS 16 impact SALES HIGHLIGHTS 0.4%* OPTICAL CABLE & FIBRE • Positive growth –with weaker H2 as anticipated- supported by positive trend mainly in Europe and North America • EBITDA Margin in H2 affected by volume slowdown and price pressure, partially
Slide 29: Cash Flow Statement
Cash Flow Statement | Euro Millions 2019 2018 Adj.EBITDA 1,007 693 Adjustments (100) (192) EBITDA 907 501 Net Change in provisions & others (73) 110 Share of income from investments in op.activities (24) (59) Cash flow from operations (before WC changes) 810 552 Working Capital changes 67 4 Dividend
Slide 30: Financial Highlights | Fully Combined Results
Financial Highlights | Euro Millions - Fully Combined Results Sales Adj.EBITDA 2019 2018 2019 2018 * organic of which Adj.EBITDA Adj.EBITDA €M €M €M €M growth IFRS 16 Margin Margin PROJECTS 1,844 -5.8% 1,750 228 7 12.4% 100 5.7% Energy & Infrastructure 5,285 0.7% 5,318 308 20 5.8% 202 3.8% Industria
Slide 31: Prysmian Group Debt Profile
Prysmian Group Debt Profile Average maturity of 3.3 years including RCF 2019 | Limited exposure to financial market volatility FIXED/VARIABLE RATE COMPOSITION FIXED/VARIABLE RATE COMPOSITION Total gross debt: 3,015 (1) Floating Unicredit TL 22% Convertible bond zero–coupon 200 480 RCF 2019 1.000 Eur
Slide 32: Bridge Consolidation Sales
Bridge Consolidation Sales | Euro Millions - Fully Combined Results Projects Energy & Infrastructure ( 101 ) 195 38 ( 142 ) 71 - 1,750 Org.growth 1,844 5,318 Org.growth 5,285 Total Consolidated -5.8% * 0.7% ( 104 ) ( 241 ) 341 2018 Organic Metal Exchange 2019 2018 Organic Metal Exchange 2019 Growth
Slide 33: ESG themes fully integrated in Prysmian Group strategy
ESG themes fully integrated in Prysmian Group strategy Sustainability is in the DNA of Prysmian Group Sustainability Scorecard 2019/2022 GOAL KPI 1 GROUP STRATEGY ALIGNED TO UN SDGs Percentage of product families (cables) covered by carbon footprint Sustainability Scorecard 2019/2022: 14 KPIs measur
Slide 34: Prysmian group at a glance
Prysmian group at a glance | 2019 Financial Results SALES BREAKDOWN BY BUSINESS SALES BREAKDOWN BY GEOGRAPHY North Latam Telecom €11.5 Billion America 8% €11.5 Billion 14% Energy & Infrastructure 30% 46% Energy Industrial & EMEA 70% Network 54% Components 22% Other 2% Projects 16% APAC 8% Adj. EBITD
Slide 35: Projects | 2019 sales breakdown
Projects | 2019 sales breakdown SALES BREAKDOWN BY BUSINESS SALES BREAKDOWN BY GEOGRAPHY North America LatAm 5% 3% High Voltage 36% APAC Submarine Energy 6% 58% Offshore specialities €1.8 Billion 3% €1.8 Billion EMEA Submarine 86% TLC 3% 35
Slide 36: Energy & Infrastructure | 2019 sales breakdown
Energy & Infrastructure | 2019 sales breakdown SALES BREAKDOWN BY BUSINESS SALES BREAKDOWN BY GEOGRAPHY Power North America Distribution EMEA 34% Trade & 34% 50% Installers 62% €5.3 Billion Overhead €5.3 Billion 4% LatAm APAC 10% 6% 36
Slide 37: Industrial & Network Components | 2019 sales breakdown
Industrial & Network Components | 2019 sales breakdown SALES BREAKDOWN BY BUSINESS SALES BREAKDOWN BY GEOGRAPHY Network Components EMEA Core Oil & Gas 6% 38% products North America Other 12% 39% Industrial 11% Elevators 10% €2.5 Billion Specialties, €2.5 Billion OEM & Renewables 39% APAC LatAm Autom
Slide 38: Telecom | 2019 sales breakdown
Telecom | 2019 sales breakdown SALES BREAKDOWN BY BUSINESS SALES BREAKDOWN BY GEOGRAPHY North America MMS EMEA 29% 28% 55% LatAm Fiber 9% 6% €1.6 Billion €1.6 Billion Telecom Solutions 66% APAC 7% 38
Slide 39: Notes
Notes (1) General Cable figures included starting from 1 January 2018; General Cable figures are restated applying Prysmian accounting principles and policies; (2) Adjusted excluding restructuring, non-operating income/expenses and non-recurring income / expenses; (3) Defined as NWC excluding deriva
Slide 40: 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
Slide 41: Thank you
Thank you prysmiangroup.com