Prysmian S.p.a. · MIL:PRY
Prysmian — Investor Presentation (May 2016)
57 slides from Prysmian's investor presentation, May 2016
Slide 1: Prysmian Group Company Presentation
Prysmian Group Company Presentation May 2016
Slide 2: Agenda
Agenda Group overview Results by business Outlook Financial Results Appendix Company Presentation – May 2016 2
Slide 3: Prysmian group at a glance
Prysmian group at a glance FY 2015 Financial Results Sales breakdown by business Sales breakdown by geography Telecom Energy APAC 15% Projects 13% 19% Oil&Gas Latin America 6% 8% Other EMEA 2% € 7,361m € 7,361m 63% North America Industrial & Energy Netw.Comp. 16% Products 20% 60% E&I 38% Adj. EBITDA
Slide 4: Q1 2016 Key Financials
Q1 2016 Key Financials Euro Millions, % on Sales Sales Adjusted EBITDA (1) **∆ OCI Contribution **∆ OCI Contribution Q1’16 vs. Q1’15 623 Q1’16 vs. Q1’15 7,361 +2.3%* 1,753 1,810 150 143** 120 12** 8.5% 6.8% 8.3% 2015 Q1 '15 Q1 '16 2015 Q1 '15 Q1 '16 * Org. Growth Operative Net Working Capital (2) Ne
Slide 5: Continued organic growth and profitability improvement
Continued organic growth and profitability improvement Margin increase driven by Energy Projects, Telecom & OCI Consolidation. Q1’15 Q1’16 * OCI Fully Consolidated Adj. EBITDA Margin 15.4% 11.2% 9.4% 10.3% 10.1% 8.7% 8.3%* 7.2% 6.8% 5.0%* 3.8% 3.8% Energy Industrial Projects E&I Oil&Gas Telecom Tota
Slide 6: Agenda
Agenda Group overview Results by business Outlook Financial Results Appendix Company Presentation – May 2016 6
Slide 7: Energy Projects
Energy Projects Euro Millions, % on Sales Sales Highlights 1,416 Submarine • Strong growth benefitting from sound project execution and low phasing in Q1 2015. +26.4%* • Margin improved thanks to a strong project management and full 346 utilization of the new installation assets. 281 • The market of
Slide 8: Energy & Infrastructure
Energy & Infrastructure Euro Millions, % on Sales Sales Highlights **∆ OCI Contribution Trade & Installers 2,795 Q1’16 vs. Q1’15 • Slightly negative organic trend affected by the decline in Brazil and Argentina, partially offset by the positive performance in the UK, -0.5%* Eastern Europe, North Ame
Slide 9: Industrial & Network Components
Industrial & Network Components Euro Millions, % on Sales Sales Highlights Specialties & OEMs 1,499 • Overall positive trend, with solid performance of Crane, Marine and Defense, partially offset by shrinking Mining and slow start of Nuclear, Railway & Rolling stock applications. +1.4%* • Continued
Slide 10: Oil & Gas
Oil & Gas Euro Millions, % on Sales Sales Highlights 421 Market outlook: • Market remains uncertain, with tough commercial environment • Steady tendering activity at low levels and slowdown in Offshore investments. -33.9%* Core Oil&Gas Cables: Prices and volumes drop across all supply chain. Leverag
Slide 11: Telecom
Telecom Euro Millions, % on Sales Sales Highlights 1,109 Telecom Solutions • Margin benefitting from fiber production cost reduction, growth of copper business in Australia and improved results of YOFC. +3.3%* • Strong optical cable demand in Australia and North America offset 279 272 by a weak mark
Slide 12: Agenda
Agenda Group overview Results by business Outlook Financial Results Appendix Company Presentation – May 2016 12
Slide 13: FY 2016 Outlook
FY 2016 Outlook Margin improvement mainly driven by Energy Projects and Telecom. Negative FX. 2016 Adj.EBITDA Target (€ million)* 2016 Adj.EBITDA Target Assumptions (€ million) Mid-point target assumptions: • Continued positive trend in Energy Projects and Telecom 670 Mid-point € 695m 720 • Moderate
Slide 14: Agenda
Agenda Group overview Results by business Outlook Financial Results Appendix Company Presentation – May 2016 14
Slide 15: Profit and Loss Statement
Profit and Loss Statement Euro Millions ∆ OCI contribution Q1 2016 Q1 2015 Q1 ‘16 vs. Q1’15 Sales 1,810 1,753 143 YoY total growth 3.3% 11.0% YoY organic growth 2.3% 5.9% Adj.EBITDA 150 120 12 % on sales 8.3% 6.8% Non recurring items (10) (14) EBITDA 140 106 12 % on sales 7.7% 6.0% Adj.EBIT 111 84 1
Slide 16: Non Recurring and Special Items on EBIT
Non Recurring and Special Items on EBIT Euro Millions Q1 2016 Q1 2015 Antitrust investigation - (6) Restructuring (7) (8) Price adjustments - - Other (3) - EBITDA adjustments (10) (14) Special items (25) 13 Gain/(loss) on metal derivatives 2 20 Assets impairment (15) (6) Other (12) (1) EBIT adjustme
Slide 17: Financial Charges
Financial Charges Euro Millions Q1 2016 Q1 2015 Net interest expenses (15) (21) of which non-cash conv.bond interest exp. (2) (2) Bank fees amortization - (1) Gain/(loss) on exchange rates 7 (11) Gain/(loss) on derivatives 1) (9) 14 Non recurring effects (1) (1) Net financial charges (18) (20) 1) In
Slide 18: Statement of financial position (Balance Sheet)
Statement of financial position (Balance Sheet) Euro Millions 31 Mar 2016 New Perimeter 31 Mar 2015 31 Dec 2015 Acquired Net fixed assets 2,449 271 2,260 2,480 of which: intangible assets 708 180 560 722 of which: property, plants & equipment 1,535 91 1,442 1,552 Net working capital 641 223 716 342
Slide 19: Cash Flow
Cash Flow Euro Millions Q1 2016 Q1 2015 Adj.EBITDA 150 120 Non recurring items (10) (14) EBITDA 140 106 Net Change in provisions & others (16) (6) Share of income from investments in op.activities (7) (7) Cash Flow from operations (bef. WC changes) 117 93 Working Capital changes (294) (286) Dividend
Slide 20: Agenda
Agenda Group overview Results by business Outlook Financial Results Appendix o Prysmian at a glance o OCI Acquisition o Financials o Energy Projects and Energy Products o Telecom Company Presentation – May 2016 20
Slide 21: Key milestones
Key milestones 1998 2001 2005 2008 2011 2014 Growth by Restructuring Managing the Reacting to downturn “Bolt-On” Profitable growth acquisition process downturn through consolidation Acquisitions Public Listing Company #1 Cable Post merger July 2005: Maker integration Strategic Closure of 11 GS March
Slide 22: 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 23: 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 400 2.3x 2.2x 2.0x 320 1.8x 1.8x 240 1.
Slide 24: 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 2007-2015 (€ mln) Prysmian + Draka Cap. Increase & Product mix 210 158 163 139 138 116 107 102 89 Approx. € 580 million cumulated CAPEX 2007-15 to
Slide 25: 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 26: Agenda
Agenda Group overview Results by business Outlook Financial Results Appendix o Prysmian at a glance o OCI Acquisition o Financials o Energy Projects and Energy Products o Telecom Company Presentation – May 2016 26
Slide 27: Focus on Oman Cables Industry Acquisition
Focus on Oman Cables Industry Acquisition A perfect example of “Bolt-on” acquisition. 2015 Sales Breakdown (€ million (1)) Structure of the Deal STRUCTURE OF THE DEAL MENA Domestic • Acquisition of approx. 16% stake in listed 57% 43% company OCI • Total cash consideration € 105 million Sales FY15 •
Slide 28: Agenda
Agenda Group overview Results by business Outlook Financial Results Appendix o Prysmian at a glance o OCI Acquisition o Financials o Energy Projects and Energy Products o Telecom Company Presentation – May 2016 28
Slide 29: New segment reporting
New segment reporting ENERGY PRODUCTS REPORTED ENERGY Industrial & Energy & PROJECTS OIL&GAS Network Infrastructure Other TELECOM Components Trade & Optical, Connectivity OEMs & Submarine SURF Installers Other Specialties & Fiber OCI Consolidation Multimedia & High Voltage Core Oil&Gas Automotive Ar
Slide 30: New segment reporting
New segment reporting Sales and Adj.EBITDA breakdowns Previous Segment Reporting FY 2015 New Segment Reporting FY 2015 Sales Sales Telecom Energy Energy Telecom 15% Projects Projects 15% Other 22% 19% 2% Oil&Gas 6% Other € 7,361m 2% € 7,361m Industrial & Netw.Comp. Energy Industrial & Energy 24% Pro
Slide 31: Profit and Loss Statement
Profit and Loss Statement Euro Millions ∆ OCI contribution Full OCI Q1’16 Q1 2016 Q1 2015 Q1 ‘16 vs. Q1’15 Results Sales 1,810 1,753 143 143 YoY total growth 3.3% 11.0% YoY organic growth 2.3% 5.9% Adj.EBITDA 150 120 12 16 % on sales 8.3% 6.8% 10.9% of which share of net income from OCI - 4 - - Non
Slide 32: Energy Projects Segment – Profit and Loss Statement
Energy Projects Segment – Profit and Loss Statement Euro Millions Q1 2016 Q1 2015 Sales to Third Parties 346 281 YoY total growth 23.3% YoY organic growth 26.4% Adj. EBITDA 39 26 % on sales 11.2% 9.4% Adj. EBIT 31 19 % on sales 8.8% 6.9% Company Presentation – May 2016 32
Slide 33: Energy Products Segment – Profit and Loss Statement
Energy Products Segment – Profit and Loss Statement Euro Millions ∆ OCI Contribution Q1 2016 Q1 2015 Q1 ‘16 vs. Q1’15 E&I 754 686 143 YoY total growth 10.0% 0.0% Sales to Third Parties YoY organic growth (0.5%) 0.0% Industrial & Netw. Comp. 333 352 - YoY total growth (5.4%) 0.0% YoY organic growth 1
Slide 34: Oil&Gas Segment – Profit and Loss Statement
Oil&Gas Segment – Profit and Loss Statement Euro Millions Q1 2016 Q1 2015 Sales to Third Parties 82 130 YoY total growth (36.8%) YoY organic growth (33.9%) Adj. EBITDA 3 13 % on sales 3.8% 10.3% Adj. EBIT (2) 10 % on sales (1.8%) 7.7% Company Presentation – May 2016 34
Slide 35: Telecom Segment – Profit and Loss Statement
Telecom Segment – Profit and Loss Statement Euro Millions Q1 2016 Q1 2015 Sales to Third Parties 272 279 YoY total growth (2.6%) 18.4% YoY organic growth 3.3% 13.1% Adj. EBITDA 42 28 % on sales 15.4% 10.1% Adj. EBIT 32 19 % on sales 11.7% 6.8% Company Presentation – May 2016 35
Slide 36: New segment reporting: 2014-15 Sales & Org. Growth by quarter
New segment reporting: 2014-15 Sales & Org. Growth by quarter Euro Millions SALES and ORG. GROWTH FY 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 FY 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 ENERGY PROJECTS 1,248 250 302 300 389 1,241 281 358 355 423 1,416 1.1% 8.4% 14.7% 15.8% 8.9% 11.9% E&I 2,747 638 6
Slide 37: New segment reporting: 2014-15 Adj. EBITDA by quarter
New segment reporting: 2014-15 Adj. EBITDA by quarter Euro Millions ADJ. EBITDA and % ON SALES FY 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 FY 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 ENERGY PROJECTS 215 6 26 52 56 140 26 73 53 68 221 17.2% 2.4% 8.6% 17.3% 14.4% 11.3% 9.4% 20.4% 14.9% 16.1% 15.6% E&I
Slide 38: Agenda
Agenda Group overview Results by business Outlook Financial Results Appendix o Prysmian at a glance o OCI Acquisition o Financials o Energy Projects and Energy Products o Telecom Company Presentation – May 2016 38
Slide 39: Investing in submarine to increase ROCE
Investing in submarine to increase ROCE Strengthening production and installation capabilities Arco Felice (Italy) Drammen (Norway) Pikkala (Finland) Main projects in execution/orders backlog: • Western Link • Shannon River • BorWin 3 / DolWin 3 • West of Adlergrund • Messina II • Cyclades • Dardane
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 2015 Cumulated Capacity by Country Cumulated Offshore Wind capacity (L axis) Others 0.3 GW Annual Additional capacity (R axis) Netherlands 0.4 GW 20 38 3.2 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 (HVDC Grid Offshore) Main power flow trends 2. France Off-Shore Main planned subsea & underground pro
Slide 42: Latest submarine projects awarded
Latest submarine projects awarded Key success factors Latest Key projects Customers Period €m* • Track record and reliability COBRA cable TenneT – Energinet.dk 2016-18 250 Hainan II China South Grid 2016-19 $140m • Ability to design/execute turnkey NSN Link Statnett SF – National Grid 2015-21 550 so
Slide 43: 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 – May 2016 43
Slide 44: 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 – May 2016 44
Slide 45: 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 46: 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 47: 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 Specialties & OEM Products for mining, crane , marine, railway
Slide 48: 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 49: Agenda
Agenda Group overview Results by business Outlook Financial Results Appendix o Prysmian at a glance o OCI Acquisition o Financials o Energy Projects and Energy Products o Telecom Company Presentation – May 2016 49
Slide 50: 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 51: 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 52: Telecom Cables Main Applications
Telecom Cables Main Applications BACKBONE METROPOLITAN RING ACCESS NETWORK Company Presentation – May 2016 52
Slide 53: 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 54: 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 55: 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 56: 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-16 J-08 J-09 J-
Slide 57: 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