Prysmian S.p.a. · MIL:PRY
Prysmian — Investor Presentation (January 2016)
60 slides from Prysmian's investor presentation, January 2016
Slide 1: Prysmian Group Company Presentation
Prysmian Group Company Presentation January 2016
Slide 2: Agenda
Agenda Group overview Results by business Outlook Financial Results Appendix Company Presentation – January 2016 2
Slide 3: Prysmian group at a glance
Prysmian group at a glance FY 2014 Financial Results Sales breakdown by business Sales breakdown by geography Telecom Energy APAC 14% Projects 13% Other 20% Latin America 2% 8% 1) € 6,840m € 6,840m 1) EMEA Industrial & 64% North America Netw.Comp. Energy 15% 25% Products 66% E&I 39% Adj. EBITDA by b
Slide 4: 9M 2015 Key Financials
9M 2015 Key Financials Euro Millions, % on Sales Sales Adjusted EBITDA (1) Excl. WL Excl. WL 6.901 603 6.840 +6.7%* +6.9%* 509 488 5.569 5.663 473 5.014 5.095 438 355 7.4% 7.1% 8.5% 8.7% 8.6% 8.6% 2014 9M'14 9M'15 2014 9M'14 9M'15 2014 9M'14 9M'15 2014 9M'14 9M'15 * Org. Growth Operative Net Working
Slide 5: Continued organic growth and profitability improvement
Continued organic growth and profitability improvement Profitability increase driven by Energy Projects, Telecom & E&I Organic Growth a) (% change) Adj.EBITDA (€ M) 2014 2015 488 H1’15 Q3’15 15 Western Link effect 438 23,9% 83 180 17,4% 173 163 160 14 473 9 135 37 13,1% 115 15 37 194 355 151 159 120
Slide 6: Agenda
Agenda Group overview Results by business Outlook Financial Results Appendix Company Presentation – January 2016 6
Slide 7: Energy Projects
Energy Projects Euro Millions, % on Sales Sales Highlights Excl. WL Submarine 1.416 +19.6%* 1.355 +19.9%* 1.215 • Market remains solid in Europe, mainly driven by Interconnections 1.121 projects. Off shore wind farms tenders in France and UK 996 915 • Order book remains close to peak levels, support
Slide 8: Focus on two milestones in Energy Projects strategy
Focus on two milestones in Energy Projects strategy Award of first submarine project in China and acquisition of GCDT in the US Hainan-China mainland submarine interconnection Gulf Coast Downhole Technologies • The first submarine cable project in People’s Republic of • Acquisition of 100% of the pr
Slide 9: Energy & Infrastructure
Energy & Infrastructure Euro Millions, % on Sales Sales Highlights 2.677 Trade & Installers +4.0%* 2.175 • Flat organic sales in 9M, softening in Q3 2.015 • Positive trend in some European countries (Spain, UK and Danubian area) and robust orders for wind farms in N.A. • Further slowdown in Brazil a
Slide 10: Industrial & Network Components
Industrial & Network Components Euro Millions, % on Sales Sales Highlights 1.708 Specialties & OEMs -0.9%* • Progressive organic improvement along the year 1.340 1.267 • Positive performance in N. America and Europe, mainly driven by Nuclear (France, Germany), Crane (Germany, US) and Railway (German
Slide 11: Telecom
Telecom Euro Millions, % on Sales Sales Highlights +10.3%* Optical, Connectivity & Fiber 994 • Positive organic growth in all geographies with the anticipated 847 softening in H2, prices stable vs. previous year 745 • Market fundamentals remain sound in the US, Europe and Australia (despite expected
Slide 12: Agenda
Agenda Group overview Results by business Outlook Financial Results Appendix Company Presentation – January 2016 12
Slide 13: FY 2015 Outlook
FY 2015 Outlook FY target confirmed above mid-point of the range 2015 Adj.EBITDA Target (€ million) 616 Mid-point € 641m 666 Western Link effect on (€ 26m) FY’15 Adj.EBITDA 590 Mid-point € 615m 640 FY 2015 expected above mid-point of the range based on: • Confirmed positive trend in Energy Projects
Slide 14: Agenda
Agenda Group overview Results by business Outlook Financial Results Appendix Company Presentation – January 2016 14
Slide 15: Profit and Loss Statement
Profit and Loss Statement Euro Millions WL effect 9M 2015 9M 2014 9M’15 vs. 9M’14 Sales 5,569 5,014 (13) YoY total growth 11.0% (15) in 9M’15 YoY organic growth 6.7% (83) in 9M’14 YoY organic growth excl. WL 6.9% Adj.EBITDA 473 355 68 % on sales 8.5% 7.1% Adj.EBITDA excl. WL 488 438 - % on sales 8.6
Slide 16: Non Recurring and Special Items on EBIT
Non Recurring and Special Items on EBIT Euro Millions 9M 2015 9M 2014 Antitrust 21 28 Restructuring (36) (16) Price adjustments - 22 Other (13) (6) EBITDA adjustments (28) 28 Special items (52) 4 Gain/(loss) on metal derivatives (29) 12 Assets impairment (7) (5) Other (16) (3) EBIT adjustments (80)
Slide 17: Financial Charges
Financial Charges Euro Millions 9M 2015 9M 2014 Net interest expenses (59) (67) of which non-cash conv.bond interest exp. (6) (6) Bank fees amortization (3) (5) Gain/(loss) on exchange rates (30) (18) Gain/(loss) on derivatives 1) 19 (9) Non recurring effects (4) (9) Net financial charges (77) (108)
Slide 18: Statement of financial position (Balance Sheet)
Statement of financial position (Balance Sheet) Euro Millions 30 Sep 2015 30 Sep 2014 31 Dec 2014 Net fixed assets 2,224 2,255 2,219 of which: intangible assets 545 586 561 of which: property, plants & equipment 1,418 1,430 1,414 Net working capital 571 900 407 of which: derivatives assets/(liabilit
Slide 19: Strong working capital management
Strong working capital management Euro Millions Evolution of Net Financial Position and Operative NWC 1.292 1.209 1.133 Net 1.040 Financial 979 955 Position 909 805 802 741 762 713 594 607 Operative 423 392 NWC ONWC on 5.8% 5.8% 11.7% 10.2% 11.2% 7.5% 13.2% 8.3% Sales %* Opening Opening 2014 2015 20
Slide 20: Cash Flow
Cash Flow Euro Millions 9M 2015 9M 2014 FY 2014 Adj.EBITDA 473 355 509 Non recurring items (28) 28 (13) EBITDA 445 383 496 Net Change in provisions & others (41) (65) (53) Share of income from investments in op.activities (27) (26) (43) Cash Flow from operations (bef. WC changes) 377 292 400 Working
Slide 21: Agenda
Agenda Group overview Results by business Outlook Financial Results Appendix o Prysmian at a glance o Financials o Energy Projects and Energy Products o Telecom Company Presentation – January 2016 21
Slide 22: Key Milestones
Key Milestones 1879 1902 1998 2001 2005 2008 2011 Organic Growth by Restructuring Managing the Growth by Establishment Profitable growth growth acquisition process downturn acquisition Listing Public #1 Cable Company July 28, ‘05: Strategic Company Maker founded as Product Closure of 11 GS “Pirelli
Slide 23: Prysmian Group business portfolio
Prysmian Group business portfolio Focus on high value added segments PROFITABILITY Submarine Look for Network Profitable High SURF Components Growth Optical Cables • Focus on & Fibre products and High Voltage service • Focus on • Limited solutions product Medium Industrial • Diversification diversif
Slide 24: Cash Flow generation as key priority to create value for shareholders
Cash Flow generation as key priority to create value for shareholders Growing capabilities to invest organically/acquisitions and remunerate shareholders Cash Flow generation Free Cash Flow (levered) excl. Acquisitions (L axis) NFP / Adj. EBITDA (R axis) € mln 320 2,4x 240 2,0x 160 1,6x 80 1,2x > €
Slide 25: Disciplined Capex to grow in high margin business and out of Europe
Disciplined Capex to grow in high margin business and out of Europe Investments focused on business with long term drivers and high entry barriers CAPEX 2007-2014 (€ mln) Prysmian + Draka Cap. Increase & Product mix 158 163 ~ 30m related to the upgrade 139 138 of Cable Enterprise 116 107 102 89 Appr
Slide 26: Metal Price Impact on Profitability
Metal Price Impact on Profitability Supply Main Application Metal Influence on Cable Price Metal Fluctuation Management Contract Impact Impact • Projects (Energy • Technology and design • Pricing locked-in at order intake transmission) content are the main • Profitability protection through Predeter
Slide 27: Agenda
Agenda Group overview Results by business Outlook Financial Results Appendix o Prysmian at a glance o Financials o Energy Projects and Energy Products o Telecom Company Presentation – January 2016 27
Slide 28: New segment reporting
New segment reporting Effective from FY 2014 SEGMENT ENERGY PRODUCTS ENERGY TELECOM PROJECTS REPORTED Industrial & Energy & Network Other Infrastructure Components Trade & OEMs & Optical, Connectivity Submarine Other Installers Specialties & Fiber Power Multimedia & High Voltage Automotive Distribut
Slide 29: New segment reporting
New segment reporting Sales and Adj.EBITDA breakdowns Previous Segment Reporting New Segment Reporting Sales Sales Telecom Telecom Energy 14% 14% Projects Other Other 20% Utilities 2% 32% 2% Industrial € 6,840m € 6,840m Industrial & 24% Netw.Comp. Energy 25% Products 66% E&I T&I 39% 28% Adj.EBITDA A
Slide 30: Energy Projects Segment – Profit and Loss Statement
Energy Projects Segment – Profit and Loss Statement Euro Millions FY 2014 excl. WL Submarine WL submarine FY 2014 FY 2013 1) project effect project effect Sales to Third Parties 1,416 (61) 1,355 1,360 YoY total growth 4.2% (0.3%) 8.8% YoY organic growth 6.1% 1.7% 6.5% Adj. EBITDA 248 (94) 154 231 %
Slide 31: Energy Products Segment – Profit and Loss Statement
Energy Products Segment – Profit and Loss Statement Euro Millions FY 2014 FY 2013 1) E&I 2,677 2,747 YoY total growth (2.6%) (12.5%) Sales to Third Parties YoY organic growth 2.7% (5.5%) Industrial & Netw. Comp. 1,708 1,788 YoY total growth (4.4%) (3.3%) YoY organic growth (0.3%) 2.1% Other 106 114
Slide 32: Telecom Segment – Profit and Loss Statement
Telecom Segment – Profit and Loss Statement Euro Millions FY 2014 FY 2013 1) Sales to Third Parties 994 986 YoY total growth 0.8% (18.0%) YoY organic growth 4.0% (15.4%) Adj. EBITDA 116 106 % on sales 11.7% 10.8% Adj. EBIT 74 63 % on sales 7.4% 6.4% 1) Final restated figures in application of IFRS 1
Slide 33: New segment reporting: 2013-14 by quarter
New segment reporting: 2013-14 by quarter Euro Millions SALES and ORGANIC GROWTH Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 ENERGY PROJECTS 278 324 368 390 268 321 326 440 2.3% 1.4% -10.8% 13.4% E&I 676 746 711 614 638 678 699 662 4.7% -0.8% 0.9% 6.9% INDUSTRIAL & NET.COMP. 434 478 438 438 414
Slide 34: Financial Structure
Financial Structure Euro Millions Debt structure (€m) 31.12.2014 (€m) Available 31.12.14 30.09.14 31.12.13 (1) Used Funds (3) Maturity Term Loan 2010 (2) - - 183 - - - Eurobond 5.25% 415 409 414 415 - 04/2015 Term Loan 2011 400 400 400 400 - 03/2016 Revolving 2011 - 150 - - 400 03/2016 Convertible b
Slide 35: Prysmian Historical Key Financials
Prysmian Historical Key Financials Euro Millions, % of Sales – Pre Draka acquisition Sales Sales Adjusted EBITDA (1) Adjusted Adjusted EBIT1EBIT (2) 529 542 5.007 5.118 5.144 4.571 464 477 407 403 387 3.742 3.731 330 334 309 +4.2% * 265 +8.2% * +9.3% * +3.2% * -17.4% * 171 2005 2006 2007 2008 2009 2
Slide 36: Historical Key Financials by Business Area – 1/2
Historical Key Financials by Business Area – 1/2 Euro Millions, % of Sales – Pre Draka acquisition Sales Vs Third Parties Adjusted EBITDA (1) Adjusted EBIT (2) 2.028 287 256 1.894 266 237 1.853 1.790 250 215 237 208 1.598 1.445 Utilities 197 157 +12.1% * 143 +3.3% * +1.5% * 107 -13.9% * 2005 2006 20
Slide 37: Historical Key Financials by Business Area – 2/2
Historical Key Financials by Business Area – 2/2 Euro Millions, % of Sales – Pre Draka acquisition Sales Vs Third Parties Adjusted EBITDA (1) Adjusted EBIT (2) 850 93 795 80 742 84 71 629 628 Industrial 62 61 489 46 +5.0% * +21.1% * 46 42 -1.1% * 39 34 -16.1% * 25 2005 2006 2007 2008 2009 2010 2005
Slide 38: Agenda
Agenda Group overview Results by business Outlook Financial Results Appendix o Prysmian at a glance o Financials o Energy Projects and Energy Products o Telecom Company Presentation – January 2016 38
Slide 39: Investing in submarine to increase ROCE
Investing in submarine to increase ROCE Strengthening production and installation (Cable Enterprise) capabilities Arco Felice (Italy) Drammen (Norway) Pikkala (Finland) Main projects in execution/orders backlog: • Western Link • Balearic Islands • HelWin 2/ SylWin 1/ • Capri BorWin 3/ DolWin 3 / • Z
Slide 40: Off-shore wind development in Europe
Off-shore wind development in Europe High visibility on new projects to be awarded next quarters Europe Offshore Wind capacity (GW) Europe 2014 Cumulated Capacity by Country Cumulated Offshore Wind capacity (L axis) Others 0.3 GW Annual Additional capacity (R axis) Netherlands 0.2 GW 20 38 1,8 Belgi
Slide 41: Major transmission projects to be awarded
Major transmission projects to be awarded Large pipeline of pan-European projects under development Main subsea and underground projects of pan-European significance List of main projects 1. Germany (Borwin IV, Dolwin VI) Main power flow trends 2. France Off-Shore Main subsea & underground projects
Slide 42: Latest submarine projects awarded
Latest submarine projects awarded Key success factors Latest Key projects Customers Period €m* • Track record and reliability NSN Link Statnett SF – National Grid 2015-21 550 West of Adlergrund Option 50Hertz Offshore GmbH From 2015 230 • Ability to design/execute turnkey Wikinger Iberdrola Renovabl
Slide 43: Western Link a milestone in the submarine sector
Western Link a milestone in the submarine sector Western Link route Large Off-shore Wind investments planned in Scotland Western Link milestones • The highest value cable project ever awarded, worth €800 mln • The highest voltage level (600kV) ever reached by an insulated cable • Currently unmatched
Slide 44: Western Link effect: new financial impact
Western Link effect: new financial impact Euro 35 Millions project’s result improvement Previous Financial Impact on Adj. Ebitda (€m) 17 94 56 Proj. loss 24 150 167 anticip. ’14 margin 94 cancelation 70 2014 Actual 2015 Prev 2016 Prev Prev Total impact Impact Impact WL effect Highlights and Actions
Slide 45: Cost Efficiency plan
Cost Efficiency plan Cumulated Cost Savings (€ million) Organization & Footprint Procurement Organization & Footprint +85 225 175 45 140 45 45 180 130 95 Optmization of European organization & 2014 YTD 2016 Target 2019 Run-rate footprint Cumulated Costs (€ million) Creation of Centers of Operati
Slide 46: SURF – Off-shore oil exploration
SURF – Off-shore oil exploration Oilfield structure Flexible Pipes Fixed Floating Platform Floating Platform (SEMI-SUBMERSIBLE) Platform (FPSO) Umbilical Injection control Umbilical (Power) Flexible Pipes Umbilical For control Christmas Manifold Tree Petrol Well Company Presentation – January 2016 4
Slide 47: SURF – Off-shore oil exploration
SURF – Off-shore oil exploration Cross selling opportunities driven by the Downhole technology business contributed by Draka Downhole Technology (DHT) HYBRID ELECTRO-OPTIC FIBER OPTIC ELECTRICAL GAS & FLUID TUBING PACKAGED GAS & FLUID TUBING Company Presentation – January 2016 47
Slide 48: Trade & Installers – Overview
Trade & Installers – Overview BUSINESS DESCRIPTION KEY SUCCESS FACTORS • Building wires, Low and Medium voltage cables for Global partner with strong local presence residential, commercial, industrial and infrastructure constructions Full Product range • Partner of the World best Wholesalers, Instal
Slide 49: Trade & Installers
Trade & Installers Offer overview - POWER SUPPLY - LIGHTING - EMERGENCY CIRCUITS (INTERIOR/EXTERIOR) RESIDENTIAL – COMMERCIAL – - CONNECTIONS - BRANCHES INDUSTRIAL - INFRASTRUCTURE - MACHINERY (MOBILE OR NOT) - CONTROL/DATA - SWITCHBOARD - ELECTRICAL APPLIANCES BEST IN CLASS FIRE RESISTANT AND LSOH
Slide 50: Industrial & Network Components – Overview
Industrial & Network Components – Overview Business description Key customers Integrated cable solutions highly customized to our Large and differentiated customer base industrial customers worldwide generally served through direct sales Oil & Gas Addressing the cable needs of research and refining,
Slide 51: Macro-structure of Energy Cables
Macro-structure of Energy Cables Product macro structure Production process Conductor Final production Outer jacket (drawing, Insulation Screening Lay up Armouring Sheathing quality (Polyolefine, PVC, …) inspection Insulation (XLPE, EPDM) stranding) WB yarns Conductor (Cu, Al) Building Wire (T&I) Lo
Slide 52: Agenda
Agenda Group overview Results by business Outlook Financial Results Appendix o Prysmian at a glance o Financials o Energy Projects and Energy Products o Telecom Company Presentation – January 2016 52
Slide 53: Telecom – Overview
Telecom – Overview Business description Key customers Integrated cable solutions focused on high -end Telecom Key customers include key operators in the telecom sector Telecom solutions Optical cables: tailored for all today’s challenging environments from underground ducts to overhead lines, rail t
Slide 54: Optical cables
Optical cables Global overview Market trends Key success factors • Demand function of level of capital expenditures • Continuous innovation and development of new budgeted by large telecom companies cable & fibre products (PTT/incumbents as well as alternative • Cable design innovation with special
Slide 55: Telecom Cables Main Applications
Telecom Cables Main Applications BACKBONE METROPOLITAN RING ACCESS NETWORK Company Presentation – January 2016 55
Slide 56: Telecom – Market trend
Telecom – Market trend 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
Slide 57: Telecom – FTTA as key driver of optical demand
Telecom – FTTA as key driver of optical demand 4G and Long Term Evolution (LTE) deployments require Fiber-to-the-Antenna (FTTA) Global LTE Growth Forecast # of users Roof top antenna towers for urban applications Antenna towers used by 4G and LTE networks Source: Informa Telecoms & Media, WCIS+, Mar
Slide 58: Macro-structure of Telecom Cables
Macro-structure of Telecom Cables Product macro structure Production process Primary Coating (250 Micron) Fibre Cladding (125 Micron) optic Core (10 Micron) Final quality Pre form deposition Consolidation Drawing inspection Main Technologies: OVD - VAD - MCVD Aramid Yarns Loose tubes Optical fibres
Slide 59: 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-15 J-08 J-09 J-10 J-
Slide 60: 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
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