Prysmian S.p.a. · MIL:PRY
Prysmian — Berenberg European Conference 2010
40 slides from Prysmian's conference presentation, Jan 27, 2011
Slide 1: Creating the World's Leading Cables & Systems Company
Creating p the Company World’s Leading y Presentation CablesEuropean Berenberg & Systems Company Conference 2010 Surrey (UK), 1stJanuary 27, 28 December 2010 2011
Slide 2: Agenda
Agenda Prysmian-Draka Transaction Highlights Prysmian-Draka P i D k A Aggregate t Financials Fi i l Prysmian Overview Appendix 1
Slide 3: Transaction Highlights
Transaction Highlights • On 22 November 2010 Prysmian and Draka announced they have reached an agreement in connection with a public offer to be made by Prysmian for all issued and outstanding ordinary shares of Draka (the “Offer”) • The Offer started on 6 January 2011 and will close at 18.00 CET on
Slide 4: Transaction Highlights (Cont'd)
Transaction Highlights (Cont (Cont’d) d) • Offer value per Draka ordinary share composed of • €8 60 in cash1 €8.60 • 0.6595 newly issued Prysmian ordinary shares for each Draka ordinary share • Implied value2 of €907 million for 100% of ordinary shares outstanding and €1.3 billion enterprise value3
Slide 5: Transaction Highlights (Cont'd)
Transaction Highlights (Cont (Cont’d) d) • Declaring the Offer unconditional will be subject to the satisfaction or waiver of certain offer conditions, such as relevant antitrust clearances for the Offer and the absence of a material adverse effect and a minimum Key Conditions acceptance threshold o
Slide 6: Offer Timetable
Offer Timetable Feb 3rd 18.00 CET • Offer period ends (closing date) within 3 business days Acceptance A t Within 10 business Have All Offer • Approx Yes Announcement days Conditions Settlement Feb 22nd in Date: Offer is Been Satisfied Date case of no Declared or Waived? extension Unconditional 2-10
Slide 7: Transaction Rationale
Transaction Rationale Creation of a World’s Leading Cables & Systems Company Unique and Highly Complementary Combination, with Increased Coverage of Emerging Markets Strengthened Leadership in All Value Added Market Segments Significant Synergy Potential Strong Platform for Future Organic Growth and
Slide 8: Draka – Company Overview
Draka – Company Overview Historical Net Sales and EBITDA¹,² (€m) 2009A Net Sales Breakdown By Business By Geography Net Sales EBITDA EBITDA Margin Communications 36% RoW10% N. America 2,816 2,829 14% Energy & 7.0% 7.2% 2,048 Infrastructure 32% 6.7% 198 203 138 Asia 21% Europe 55% 2007 2008 2009 Indu
Slide 9: Creation of a World's Leading Cables & Systems Company
Creation of a World World’s s Leading Cables & Systems Company €bn, 2009 Net Sales ~5.8 4.6 3.7 3.1 3.0 2.8 2.6 2.1 2.0 1.9 Prysmian + Nexans Prysmian Southwire General Cable LS Cable Furukawa Fujikura Draka Hitachi Cable Draka Source: Companies' Annual Reports Note: Nexans excluding Electrical Wire
Slide 10: Unique and Highly Complementary Combination
Unique and Highly Complementary Combination Strengthening Geographical Presence • Enlarged presence in Industrial cables in key markets of North • Increased presence in attractive emerging markets (e.g. China, America, Germany and China Middle East, Brazil, ASEAN, India and Russia) • Improved countr
Slide 11: Unique and Highly Complementary Combination (Cont'd)
Unique and Highly Complementary Combination (Cont (Cont’d) d) Excellent Business Fit • The combination will leverage on leading technology in all key cable segments • Excellent business fit in Energy and Telecom businesses creating leadership positions in high-technology sub- segments • Leader in Op
Slide 12: New Group Will Have a Leading Presence in All Market Segments
New Group Will Have a Leading Presence in All Market Segments Utilities T&I Telecom High-end Industrials • Underground EHV, HV dc/ac • LV cable for residential and non • Coaxial cables (CATV) • On-shore and off-shore wind residential construction farm • Submarine EHV dc/ac (extruded, • Last mile mic
Slide 13: High Synergy Potential Expected for the Benefit of All Stakeholders
High Synergy Potential Expected for the Benefit of All Stakeholders ● Global industrial presence with opportunities for: cross-fertilization cross fertilization in lean manufacturing and R&D know-how, know how, manufacturing footprint optimization, improved logistic flows in Europe, natural hedge ag
Slide 14: Prysmian's Offer Creates Value for all Draka's Stakeholders
Prysmian s Offer Creates Value for all Draka’s Prysmian’s Draka s Stakeholders While Preserving the Interests of its Own Shareholders ● Value enhancement for Draka products ● Creation of a leader in the cable industry through the creation of a larger platform with with global presence and strong, su
Slide 15: Agenda
Agenda Prysmian-Draka Transaction Highlights Prysmian-Draka P i D k A Aggregate t Financials Fi i l Prysmian Overview Appendix 14
Slide 16: Aggregate Financials
Aggregate Financials Net Sales (€m) EBITDA1 (€m) 8,004 7,973 6,826 2,816 2,829 5,779 2,428 727 745 2,048 203 198 541 528 138 143 5,188 5,144 4,398 3,731 529 542 403 385 2007 2008 2009 2010E² 2007 2008 2009 2010E² Prysmian Draka 1. Adjusted for non-recurring items as reported by Prysmian and Draka. 2
Slide 17: Aggregate Financials – 2009A Figures
Aggregate Financials – 2009A Figures Prysmian Draka Aggregate Asia & Oceania 10% RoW 10% RoW 3% €3.7bn €2.0bn €5.8bn N. America 14% Asia & Oceania 14% L. America Net Sales By y Geography¹ 10% N. America 9% N. And S. Asia Europe EMEA EMEA America 17% 21% 55% 65% 71% Telecom 11% Communications 36% Tel
Slide 18: Pro-forma Aggregate Net Debt
Pro-forma Pro forma Aggregate Net Debt 2010E Prysmian EBITDA €385m 2010E Aggregate EBITDA €528m Net Debt/2010E EBITDA 1.36x Net Debt/2010E EBITDA 2.49x 281 1,316 86 425¹ 524 Prysmian Net Debt Cash Consideration Cash Consideration Draka Net Debt Pro-forma 31-Dec-2010E Ordinary Shares Preference Share
Slide 19: Agenda
Agenda Prysmian-Draka Transaction Highlights Prysmian-Draka P i D k A Aggregate t Financials Fi i l Prysmian Overview Appendix 18
Slide 20: Leadership in high value added businesses
Leadership in high value added businesses PROFITABILITY Extended Look for Profitable SURF business (Flexible Pipes + Growth perimeter Umbilicals) Global businesses Submarine High Optical Cables & Fibre Extra HV • Focus on products High Voltage and service Industrial • Limited Li it d product d t • F
Slide 21: High technology segments supporting profitability in global downturn
High technology segments supporting profitability in global downturn, potential upside from recovery in cyclical business Cyclical business (2) FY2009 Adj.EBITDA Adj.EBITDA (€m) ~ 320 ~ 260 ~ 270 ~ 35% ~ 65% ~ 145 2006 2007 2008 2009 High technology business (1) % on total Adj.EBITDA ~ 65% • Fixed a
Slide 22: 9M 2010 Key Financials
9M 2010 Key Financials Euro Millions, % of Sales Sales Sales Adjusted EBITDA (1) Adjusted Adjusted EBITEBIT 1 (1) 5 118 5,118 5 144 5,144 529 542 464 477 3,731 403 + 4.2%* 334 -17.4%* 3,330 2,777 292 281 242 224 2007 2008 2009 9M'09 9M'10 2007 2008 2009 9M'09 9M'10 2007 2008 2009 9M'09 9M'10 * Organ
Slide 23: Utilities Transmission – Growing Prysmian leadership in a sound market demand
Utilities Transmission – Growing Prysmian leadership in a sound market demand Submarine Order Book (€m) ~ 900 ~ 800 Transmission O Order Book (€m) (€ ) ~ 650 ~ 650 ~ 1,400 ~ 550 ~ 1,100 1 100 ~ 1,050 ~ 900 ~ 850 FY'08 H1'09 FY'09 H1'10 Sept'10 High Voltage Order Book (€m) ~ 500 ~ 400 FY'08 H1'09 FY'
Slide 24: Organic growth improvement confirmed across all the Energy segments
Organic growth improvement confirmed across all the Energy segments Euro Millions Q1’10 Org. Growth (%) Q2’10 Org. Growth (%) Q3’10 Org. Growth (%) 13.5% 10.3% 7.9% 8.1% 7.6% 3.4% 4.3% 1.0% 1.0% Utilities T&I Industrial Telecom Total Telecom Utilities T&I Industrial Telecom Total Utilities T&I Indus
Slide 25: Agenda
Agenda Prysmian-Draka Transaction Highlights Prysmian-Draka P i D k A Aggregate t Financials Fi i l Prysmian Overview Appendix 24
Slide 26: Stronger Platform for Future Organic Growth and Industry Consolidation
Stronger Platform for Future Organic Growth and Industry Consolidation Industry Trends ● Complementary businesses and product portfolios offer enhanced growth opportunities Consolidation of ● Increase customer base width and suppliers diversification with limited areas of commercial overlap ● Increa
Slide 27: Pro-Forma Shareholding Structure
Pro-Forma Pro Forma Shareholding Structure • Flint Investments B.V. has irrevocably undertaken to tender all Shares held by it to Prysmian’s Offer¹ Current Prysmian Current Draka Shareholding New Prysmian Pro Forma Shareholding (Common Shares) Shareholding Clubtre S.r.l. Flint Investments 5.008%% 7
Slide 28: Appendix - Prysmian
ZF PRYSMIAN CABLES & SYSTEMS <> Draka Appendix - Prysmian 27
Slide 29: A Complete and Diversified Presence and Product Offering
A Complete and Diversified Presence and Product Offering Sales LTM 9M 2010 Euro Millions By Business Area By Geography North Telecom America 424 376 Others 2% Latin Utilities America 9% 101 10% 1,699 450 11% Industrial 40% 699 16% €4,284m APAC 10% 449 €4,284m 70% 32% EMEA Trade & Installers 3 009 3,
Slide 30: Utilities
Utilities Euro Millions, % of Sales Sales VsSales Third Parties Adjusted EBITDA (1) Adjusted Adjusted EBITEBIT 1 (1) 2 028 2,028 287 1,894 266 256 1,598 237 237 +12.1%* -13.9%* 208 1,292 192 1,191 182 171 157 2007 2008 2009 9M'09 9M'10 2007 2008 2009 9M'09 9M'10 2007 2008 2009 9M'09 9M'10 * Organic
Slide 31: Trade & Installers
Trade & Installers Euro Millions, % of Sales Sales Vs Sales Third Parties Adjusted EBITDA (1) Adjusted Adjusted EBITEBIT 1 (1) 1 802 1,802 155 1,629 137 - 5.0%* 113 100 1,095 --21.5%* 1,020 754 41 32 32 26 22 20 2007 2008 2009 9M'09 9M'10 2007 2008 2009 9M'09 9M'10 2007 2008 2009 9M'09 9M'10 * Organ
Slide 32: Industrial
Industrial Euro Millions, % of Sales Sales Vs Sales Third Parties Adjusted EBITDA (1) Adjusted Adjusted EBITEBIT 1 (1) 850 93 795 84 80 + 5.0%* 628 71 -16.1%* 62 529 458 46 40 41 28 27 2007 2008 2009 9M'09 9M'10 2007 2008 2009 9M'09 9M'10 2007 2008 2009 9M'09 9M'10 * Organic g Growth 10.6% 10.9% 9.8
Slide 33: Telecom
Telecom Euro Millions, % of Sales Sales Vs Sales Third Parties Adjusted EBITDA (1) Adjusted Adjusted EBITEBIT 1 (1) 535 536 49 + 5.2%* -20.7%* 48 403 44 45 312 333 31 25 25 25 20 19 2007 2008 2009 9M'09 9M'10 2007 2008 2009 9M'09 9M'10 2007 2008 2009 9M'09 9M'10 * Organic g Growth 8 6% 8.6% 9 0% 9.0
Slide 34: 2010 Outlook – Market recovery in line with initial expectations
2010 Outlook – Market recovery in line with initial expectations to achieve FY Target Adj.EBITDA Midpoint Target confirmed € 350m € 375m € 400m Transmission order book and volume increase in Power distribution supporting Q4 results in Utilities business Ongoing O i volume l recovery in i T&I (fr
Slide 35: A unique portfolio driving sustainable margin growth
A unique portfolio driving sustainable margin growth Adj.EBITDA (€ Millions); Adj.EBITDA margin (%) Utilities - Distribution Trade&Installers Telecom Utilities - Trasmission Industrials 287 266 Transmission: 237 ~70% of adj.EBITDA 197 Industrial Priority: ~75% of ~70% adj.EBITDA 155 ~60% 119 113 ~50
Slide 36: Laying the future: Disciplined capex to fuel growth
Laying the future Disciplined capex to fuel growth in high value added segments Capacity Increase & Product mix development (€m) Capital Expenditure by destination (2009) 116 107 Telecom Industrial 85 89 5% 4% Surf 63 Maintenance 25 % 17 % 57 49 37 € 107m 17 % IT, R&D 2006 2007 2008 2009 Utilities 2
Slide 37: Long term drivers to keep growing in high technology segments
Long term drivers to keep growing in high technology segments ● First tangible signs of start in European interconnections Utilities ● Grid expansion and replacement of ageing networks Transmission ● Leading player in fast-growing off-shore wind farms • Recovery in oil off-shore exploitation activit
Slide 38: Industrial - SURF (Subsea Umbilicals, Risers and Flowline)
Industrial - SURF (Subsea Umbilicals, Risers and Flowline) SURF is a subsector of the Subsea market covering all the Flexible Pipes and Umbilicals to transfer fluids from the seabed to the surface and vice versa • High cable requirement • High capital cost • Complex technology Umbilical Umbilical Um
Slide 39: Prysmian Key Milestones
Prysmian Key Milestones 1998 2001 2005 2008 2010 Growth by Restructuring Profitable growth Managing the downturn acquisition process Public Listing Closure of 11 Company July 28th 2005: Strategic plants May 3rd 2007: March 2010: Acquisitions Goldman Sachs investments Disposal of Company listed Prysm
Slide 40: Disclaimer
Disclaimer This document has been prepared by Prysmian and Draka solely for information purposes and for use in presentations of the transaction described herein. This presentation does not constitute or form part of any offer or invitation to sell, purchase or exchange any securities or a solicitat