Prysmian S.p.a. · MIL:PRY
Prysmian — FY2013 Earnings Presentation
41 slides from Prysmian's earnings presentation, Feb 25, 2014
Slide 1: FY 2013 Financial Results
FY 2013 Financial Results Milan – February 25th, 2014 FY 2013 Financial Results 1
Slide 2: Agenda
AGENDA FY 2013 Highlights • Group Overview • Results by business Financial Results Appendix FY 2013 Financial Results 2
Slide 3: 2013 Key Achievements
2013 Key Achievements FY targets achieved despite continuous weak economic environment and negative exchange rates Adj. EBITDA at € 612 million: initial guidance (€ 600-650 million) achieved despite € 23m of negative exchange rates effect (mainly in H2). Adj.EBITDA excl. exchange rate effects at €
Slide 4: FY 2013 Key Financials
FY 2013 Key Financials Euro Millions, % on Sales Sales Adjusted EBITDA (3) Adjusted EBIT (4) -1.8%* -3.1%* 483 647 7,973 612 457 7,848 586 7,273 435 2011 (1) 2012 2013 2011 (1) 2012 2013 2011 (1) 2012 2013 * Org. Growth 7.3% 8.2% 8.4% 5.5% 6.2% 6.3% Adjusted Net Income (5) Operative Net Working Capi
Slide 5: Organic Growth and Adj.EBITDA evolution
Organic Growth and Adj.EBITDA evolution Gradual improvement through the year driving better profitability and margin increase Organic Growth evolution Adj. EBITDA evolution % change on previous year period Euro million & % on Sales Utilities T&I Industrial Telecom Total 11.3% 121 Utilities 7.8% 13.9
Slide 6: 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 2007-2013 (€ mln) Cap. Increase & Product mix Prysmian + Draka € 27 million related to industrial Other 159 152 144 and R&D/HQ building 116 107 102
Slide 7: 2013 Synergies over target: Procurement run-rate, Overheads almost completed
2013 Synergies over target: Procurement run-rate, Overheads almost completed Plants rationalization to be executed in line with customers requirements to preserve service level Synergies Plan Euro million Overheads (Fixed costs) ~ 175 Procurement 150-160 Operations ~ 140 70 120 100 60 45 65 45 30 45
Slide 8: Agenda
AGENDA FY 2013 Highlights • Group Overview • Results by business Financial Results Appendix FY 2013 Financial Results 8
Slide 9: Utilities
Utilities Euro Millions, % on Sales Sales to Third Parties Highlights DISTRIBUTION +1.1%* -1.4%* • New bottom in H2’13 due to continuous decrease in utilities capex (mainly in 2,318 2,287 2,224 Europe). No volume recovery expected in the short term (based on current order-book). Trough in profitabil
Slide 10: Utilities: Growth in Transmission sustained by strong order-book
Utilities Growth in Transmission sustained by strong order-book PD - Adj. EBITDA evolution PD – Volumes and margins evolution in 2012-13 Euro million Volumes (H1’12=100) – Adj.EBITDA (€ mln) 150 120 30 120 100 90 20 Volumes (L axis) 80 60 10 Adj.EBITDA (R 60 axis) 30 0 40 0 FY2007 FY2012 FY2013 H1'1
Slide 11: Trade & Installers
Trade & Installers Euro Millions, % on Sales Sales to Third Parties Highlights -2.6%* -4.3%* • Gradual volume improvement in H2’13 Vs. bottom level achieved in H1. Profitability still under pressure due to currencies and price 2,233 2,159 1,914 • Europe: demand still at low level in all major countr
Slide 12: Industrial
Industrial Euro Millions, % on Sales Sales to Third Parties Highlights OGP -1.5%* +4.1%* • Lower sales and profitability Vs previous year due to major decrease in on- 1,824 1,801 1,765 shore business and postponement of off-shore projects in Singapore expected to be executed in 2014. Strengthening p
Slide 13: Industrial: New commercial initiatives delivering results out of Europe
Industrial New commercial initiatives delivering results out of Europe in OEMs, OGP & Surf and Elevator FY 2013 Sales Organic Growth by geographical area (Vs. FY 2012) Main positive: • Crane +4% • Railway Main negative: • OGP 2013 • OGP Org.growth • Infrastructure -3% • Renewables NORTH AMERICA 2013
Slide 14: Telecom
Telecom Euro Millions, % on Sales Sales to Third Parties Highlights -3.5%* -12.0%* • Gradual improvement in organic change (Vs previous year) thanks to weak comparable basis from H2’13. Profitability strongly penalized by lower 1,431 1,466 volumes and negative currency effect (e.g. South America, US
Slide 15: Agenda
AGENDA FY 2013 Highlights • Group Overview • Results by business Financial Results Appendix FY 2013 Financial Results 15
Slide 16: Profit and Loss Statement
Profit and Loss Statement Euro Millions FY 2013 FY 2012 Sales 7,273 7,848 YoY total growth (7.3%) YoY organic growth (3.1%) Adj.EBITDA 612 647 % on sales 8.4% 8.2% Non recurring items (50) (101) EBITDA 562 546 % on sales 7.7% 7.0% Adj.EBIT 457 483 % on sales 6.3% 6.2% Non recurring items (50) (101)
Slide 17: Impact of currencies on Sales and Adj.EBITDA
Impact of currencies on Sales and Adj.EBITDA Profitability decrease (vs. FY’12) mainly attributable to currency translation effect Sales Adj. EBITDA Euro million Euro million Currency effect Of which: Currency effect Of which: • Utilities 55 • Utilities 5 • T&I 82 • T&I 6 • Industrial 69 • Industria
Slide 18: Extraordinary Effects
Extraordinary Effects Euro Millions FY 2013 FY 2012 Antitrust investigation 6 (1) Restructuring (50) (74) Draka integration costs - (9) Other (6) (17) EBITDA adjustments (50) (101) Special items (47) (20) Gain/(loss) on metal derivatives (8) 14 Assets impairment (25) (24) Other (14) (10) EBIT adjust
Slide 19: Financial Charges
Financial Charges Euro Millions FY 2013 FY 2012 Net interest expenses (105) (111) a) of which non cash Conv.Bond interest exp. (6) - Bank fees amortization (8) (10) Gain/(loss) on exchange rates (25) (29) Gain/(loss) on derivatives (1 ) (8) 18 Non recurring effects (7) (5) Net financial charges (153
Slide 20: Statement of financial position (Balance Sheet)
Statement of financial position (Balance Sheet) Euro Millions 31 Dec 2013 31 Dec 2012 a) Net fixed assets 2,190 2,300 of which: intangible assets 623 644 of which: property, plants & equipment 1,441 1,539 Net working capital 444 482 of which: derivatives assets/(liabilities) (6) (7) of which: Operat
Slide 21: Cash Flow
Cash Flow Euro Millions FY 2013 FY 2012 Adj.EBITDA 612 647 Non recurring items (50) (101) EBITDA 562 546 Net Change in provisions & others (80) (1) CF from operations (before WC changes) 482 545 Working Capital changes (19) 75 ∆ NFP 2010PF -2013 Paid Income Taxes (64) (74) Cash flow from operations
Slide 22: Dividends
Dividends Dividend per share in line with last year supported by sound cash generation Dividend proposed to the forthcoming Shareholders’ Meeting • Dividend Per Share € 0.420 Total Shares (1) • Total payout: € 89 millions 214,591,710 • Ex-dividend date: 22 April 2014 • Payment date: 25 April 2014 •
Slide 23: Agenda
AGENDA FY 2013 Highlights • Group Overview • Results by business Financial Results Appendix FY 2013 Financial Results 23
Slide 24: Prysmian Group at a glance
Prysmian Group at a glance FY 2013 Results Sales breakdown by geography Sales breakdown by business APAC Telecom 15% 17% Utilities 31% Latin America Other 8% 2% € 7.3 bn € 7.3 bn North America Industrial 14% EMEA 24% 63% T&I 26% Adj. EBITDA by business Adj. EBITDA margin by business Telecom 12.6% 19
Slide 25: 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 2012 benefited from approx. €100m cash-in (submarine business) expected in 2013 € mln 320 2.4x 240 2.0x 160 1.6x 80 1.2x Appr
Slide 26: Improving operating leverage during the downturn
Improving operating leverage during the downturn Approx. € 240m adj.EBITDA reduction from 2007 despite cost rationalization Power Distribution + T&I Adj. EBITDA and Fixed Costs – Euro million 400 Over € 45m fixed costs reduction from overheads and operations in FY13 vs. FY11 300 200 100 0 2007 2008
Slide 27: Bridge Consolidated Sales
Bridge Consolidated Sales Euro Millions Total Consolidated (3.1%) (241) (142) (251) 59 7,848 7,214 7,273 FY 2012 Org.Growth Metal Effect Exchange Rate FY 2013 L-f-L Perimeter effect FY 2013 Energy Cables & Systems Division (1.0%) (65) (134) (209) 44 6,382 5,974 6,018 FY 2012 Org.Growth Metal Effect
Slide 28: Energy Segment – Profit and Loss Statement
Energy Segment – Profit and Loss Statement Euro Millions FY 2013 FY 2012 Sales to Third Parties 6,018 6,382 YoY total growth (5.7%) YoY organic growth (1.0%) Adj. EBITDA 492 487 % on sales 8.2% 7.6% Adj. EBIT 387 379 % on sales 6.4% 5.9% FY 2013 Financial Results 28
Slide 29: Energy Segment – Sales and Profitability by business area
Energy Segment – Sales and Profitability by business area Euro Millions, % on Sales Total Organic FY 2013 FY 2012 growth growth Sales to Third Parties Utilities 2,224 2,287 (2.8%) (1.4%) Trade & Installers 1,914 2,159 (11.3%) (4.3%) Industrial 1,765 1,801 (2.0%) 4.1% Others 115 135 n.m. n.m. Total E
Slide 30: Telecom Segment – Profit and Loss Statement
Telecom Segment – Profit and Loss Statement Euro Millions FY 2013 FY 2012 Sales to Third Parties 1,255 1,466 YoY total growth (14.4%) YoY organic growth (12.0%) Adj. EBITDA 120 160 % on sales 9.6% 10.9% Adj. EBIT 70 104 % on sales 5.6% 7.1% FY 2013 Financial Results 30
Slide 31: Utilities: Sales breakdown and Orders Backlog evolution
Utilities Sales breakdown and Orders Backlog evolution Sales breakdown Orders Backlog Evolution FY 2013 Submarine (€ million) ~2,300 ~2,050 ~1,900 ~1,700 Network components ~1,050 6% ~800 ~900 ~1,000 ~650 Transmission - Submarine 33% Dec Jun Dec Jun Dec Jun Dec Jun Dec 2009 2010 2010 2011 2011 2012
Slide 32: Trade & Installers: Sales breakdown
Trade & Installers Sales breakdown Sales breakdown by geographical area Total Construction Investments FY 2013 2013 = 100 120 N.A. APAC Latam 110 Eastern Europe Europe 24% 100 Italy & Spain 90 7% Nordics 9% 80 A10 A11 A12 E13 E14 E15 E16 N. America € 1.9 bn 7% Focus on Europe 2013 = 100 Latin Americ
Slide 33: Industrial: Sales breakdown
Industrial Sales breakdown Sales breakdown by geographical area Sales breakdown by business segment FY 2013 FY 2013 Other Asia Pacific Elevator 4% 18% 8% Specialties & Renewables OEM 9% 34% EMEA Latin America 46% 10% € 1.8 bn € 1.8 bn OGP & SURF 22% North America Automotive 26% 23% FY 2013 Financial
Slide 34: Telecom: Sales breakdown
Telecom Sales breakdown Sales breakdown by geographical area Sales breakdown by business segment FY 2013 FY 2013 Asia Pacific JVs and other Optical, 32% 26% Connectivity and Fiber 45% EMEA € 1.3 bn 46% € 1.3 bn Multimedia & Specials Latin America 17% 12% North America Copper 10% 12% FY 2013 Financia
Slide 35: Net Financial Position
Net Financial Position Euro Millions Net Financial Position bridge (17 ) 92 ( 482) 126 114 64 918 19 834 NFP Cash Flow NWC Paid Taxes Net Financial Dividends Other NFP 31 Dec '12 from Variations Operative Charges 31 Dec '13 Operations CAPEX (before WC changes) NFP / Adj.EBITDA 1.4x 1.4x FY 2013 Fina
Slide 36: CAPEX evolution
CAPEX evolution Investments focused on high value added businesses Capacity Increase & Product mix (€m) 2013 Capex by destination Capacity Increase & Product Mix Capacity Increase & Product Mix Other Capex 159 152 144 116 Other 107 102 89 19% Utilities 26% 90 88 IT and R&D 57 63 54 61 49 12% € 144 m
Slide 37: P&L Statement – 2013 Restated in application of IFRS 10-11
P&L Statement – 2013 Restated in application of IFRS 10-11 Euro Millions FY 2013 FY 2013 Restated a) Sales 7,273 6,998 Adj.EBITDA 612 613 of which share of net income - 35 Non recurring items (50) (50) EBITDA 562 563 Adj.EBIT 457 467 Non recurring items (50) (50) Special items (47) (47) EBIT 360 370
Slide 38: Statement of fin. position (BS) - 2013 Restated in application of IFRS 10-11
Statement of fin. position (BS) - 2013 Restated in application of IFRS 10-11 Euro Millions 31 Dec 2013 31 Dec 2013 Restated a) Net fixed assets 2,190 2,207 of which: intangible assets 623 588 of which: property, plants & equipment 1,441 1,390 Net working capital 444 391 of which: derivatives assets/
Slide 39: Cash Flow - 2013 Restated in application of IFRS 10-11
Cash Flow - 2013 Restated in application of IFRS 10-11 Euro Millions FY 2013 FY 2013 Restated a) Adj.EBITDA 612 613 Non recurring items (50) (50) EBITDA 562 563 Net Change in provisions & others (80) (77) Share of income from investments in op. activities - (34) Cash flow from operations (before WC
Slide 40: 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 41: 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