Prysmian S.p.a. · MIL:PRY
Prysmian — Investor Presentation (March 2017)
53 slides from Prysmian's investor presentation, March 2017
Slide 1: Prysmian Group Company Presentation
Prysmian Group Company Presentation March 2017
Slide 2: Agenda
Agenda Group overview Results by business Financial Results Appendix Company Presentation – March 2017 2
Slide 3: Prysmian group at a glance
Prysmian group at a glance FY 2016 Financial Results Sales breakdown by business Sales breakdown by geography Telecom Energy APAC 15% Projects 13% 22% Latin America Oil&Gas 6% 4% Other 1% € 7,567m North America € 7,567m EMEA 14% 67% Industrial & Energy Netw.Comp. Products 18% 59% E&I 40% Adj. EBITDA
Slide 4: FY 2016 Key Financials
FY 2016 Key Financials Euro Millions, % on Sales Sales Adjusted EBITDA (1) **∆ OCI Contribution FY’16 vs. FY’15 * Excl. €24m WL previous loss write-up **∆ OCI Contribution FY’16 vs. FY’15 +1.0%* 711 7,361 7,567 623 37** 537** 599* 8.5% 9.4% 2015 2016 2015 2016 * Org. Growth Operative Net Working Cap
Slide 5: Continued profitability improvement
Continued profitability improvement Underlying margin increase in all business excluding Oil&Gas FY’15 FY’16 * Excl. €24m WL previous loss write-up ** Excl. €8m bad debt provision Adj. EBITDA Margin 14.7%** 15.6% 15.9% ~14%* 12.1% 9.5% 14.0% 8.5% 9.4% 8.1% 4.6% 5.1% 8.1%* 3.8% 2.7% Energy Industrial
Slide 6: Agenda
Agenda Group overview Results by business Financial Results Appendix Company Presentation – March 2017 6
Slide 7: Energy Projects
Energy Projects Euro Millions, % on Sales Sales Highlights +18.5%* Submarine +11.9%* 1,634 • Sound double-digit organic growth benefitting from a favourable project 1,416 phasing and effective execution. 1,241 • Adj.EBITDA margin driven by strong revenue growth, sound execution and new installation
Slide 8: Energy & Infrastructure
Energy & Infrastructure Euro Millions, % on Sales Sales Highlights **∆ OCI Contribution FY’16 vs. FY’15 Trade & Installers -3.1%* +3.0%* 3,016 • Negative organic trend driven by sharp decline in South America and 2,795 moderate slowdown in Central Eastern and Southern Europe. Positive 2,677 537** pe
Slide 9: Industrial & Network Components
Industrial & Network Components Euro Millions, % on Sales Sales Highlights -0.8%* -4.6%* Specialties, OEMs & Renewables 1,499 • Mid single digit organic decline, due to slowdown in Renewables segment 1,440 (mainly China) and volume drop in Mining, Nuclear and Railway, partially 1,343 offset by the s
Slide 10: Oil & Gas
Oil & Gas Euro Millions, % on Sales Sales Highlights +10.0%* -29.3%* SURF 421 • Umbilical: Sharp volumes drop, in line with the expected market evolution 382 due to Petrobras limited orders in 2016. 300 • DHT: Slight decline in Sales and Adj.EBITDA, partially compensated by the consolidation of GCDT
Slide 11: Telecom
Telecom Euro Millions, % on Sales Sales Highlights +8.5%* Telecom Solutions +9.9%* 1,164 1,109 • Positive trend in Optical cables and fiber, accelerating in Q4, driven by solid performance in the US, France, Eastern Europe and Australia. 994 • Investments in fiber manufacturing efficiency paying off
Slide 12: Agenda
Agenda Group overview Results by business Financial Results Appendix Company Presentation – March 2017 12
Slide 13: Profit and Loss Statement
Profit and Loss Statement Euro Millions ∆ OCI contrib. FY 2016 FY 2015 FY ‘16 vs. FY ’15 Sales 7,567 7,361 537 YoY total growth 2.8% 7.6% 0.0% YoY organic growth 1.0% 5.3% 0.0% Adj.EBITDA 711 623 37 % on sales 9.4% 8.5% Adjustments (66) (1) (5) EBITDA 645 622 32 % on sales 8.5% 8.4% Adj.EBIT 538 473
Slide 14: Adjustments and Special Items on EBIT
Adjustments and Special Items on EBIT Euro Millions FY 2016 FY 2015 Non-recurring Items (Antitrust Investigation) 1 29 Restructuring (50) (48) Other Non-operating Income / (Expenses) (17) 18 EBITDA adjustments (66) (1) Special items (25) (73) Gain/(loss) on metal derivatives 54 (27) Assets impairmen
Slide 15: Financial Charges
Financial Charges Euro Millions FY 2016 FY 2015 Net interest expenses (62) (73) of which non-cash conv.bond interest exp. (8) (8) Bank fees amortization (4) (4) Gain/(loss) on exchange rates (9) (31) Gain/(loss) on derivatives 1) (3) 12 Non recurring effects (2) (2) Other 1 9 Net financial charges (
Slide 16: Statement of financial position (Balance Sheet)
Statement of financial position (Balance Sheet) Euro Millions 31 Dec 2016 31 Dec 2015* Net fixed assets 2,630 2,581 of which: goodwill 448 452 of which: intangible assets 344 371 of which: property, plants & equipment 1,631 1,552 Net working capital 325 347 of which: derivatives assets/(liabilities)
Slide 17: Cash Flow
Cash Flow Euro Millions Full OCI FY 2016 FY 2016 FY 2015 Cash-flow Adj.EBITDA 711 623 52 Adjustments (66) (1) (5) EBITDA 645 622 47 Net Change in provisions & others - (75) - Share of income from investments in op.activities (31) (39) - Cash Flow from operations (bef. WC changes) 614 508 47 Working
Slide 18: Agenda
Agenda Group overview Results by business Financial Results Appendix o Prysmian at a glance o OCI Acquisition o Financials o Energy Projects and Energy Products o Telecom Company Presentation – March 2017 18
Slide 19: Key milestones
Key milestones 1998 2001 2005 2008 2011 2015 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 20: Prysmian Group business portfolio
Prysmian Group business portfolio Focus on high value added segments PROFITABILITY Submarine Look for Network Profitable High Components Growth Optical Cables • Focus on & Fibre products and High Voltage service • Focus on • Limited solutions product Medium Oil&Gas Industrial • Diversification diver
Slide 21: 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 22: 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 2007-2016 (€ mln) Prysmian + Draka 233 Cap. Increase & Product mix 210 158 163 139 138 116 107 102 89 Approx. € 680 million cumulated CAPEX 2007-16
Slide 23: 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 24: Agenda
Agenda Group overview Results by business Financial Results Appendix o Prysmian at a glance o OCI Acquisition o Financials o Energy Projects and Energy Products o Telecom Company Presentation – March 2017 24
Slide 25: 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 26: Agenda
Agenda Group overview Results by business Financial Results Appendix o Prysmian at a glance o OCI Acquisition o Financials o Energy Projects and Energy Products o Telecom Company Presentation – March 2017 26
Slide 27: Profit and Loss Statement
Profit and Loss Statement Euro Millions ∆ OCI contrib. Full OCI FY’16 FY 2016 FY 2015 FY ‘16 vs. FY ’15 Results Sales 7,567 7,361 537 537 YoY total growth 2.8% 7.6% 0.0% 0.0% YoY organic growth 1.0% 5.3% 0.0% 0.0% Adj.EBITDA 711 623 37 52 % on sales 9.4% 8.5% 9.7% of which share of net income 31 39
Slide 28: Energy Projects Segment – Profit and Loss Statement
Energy Projects Segment – Profit and Loss Statement Euro Millions FY 2016 FY 2015 Sales to Third Parties 1,634 1,416 YoY total growth 15.4% 0.0% YoY organic growth 18.5% 0.0% Adj. EBITDA 260 221 % on sales 15.9% 15.6% Adj. EBIT 224 187 % on sales 13.7% 13.2% Company Presentation – March 2017 28
Slide 29: Energy Products Segment – Profit and Loss Statement
Energy Products Segment – Profit and Loss Statement Euro Millions ∆ OCI Contribution FY 2016 FY 2015 FY ‘16 vs. FY ’15 E&I 3,016 2,795 537 YoY total growth 7.9% 0.0% Sales to Third Parties YoY organic growth (3.1%) 0.0% Industrial & Netw. Comp. 1,343 1,499 - YoY total growth (10.4%) 0.0% YoY organic
Slide 30: Oil&Gas Segment – Profit and Loss Statement
Oil&Gas Segment – Profit and Loss Statement Euro Millions FY 2016 FY 2015 Sales to Third Parties 300 421 YoY total growth (28.9%) 0.0% YoY organic growth (29.3%) 0.0% Adj. EBITDA 8 16 % on sales 2.7% 3.8% Adj. EBIT (7) 3 % on sales (2.4%) 0.7% Company Presentation – March 2017 30
Slide 31: Telecom Segment – Profit and Loss Statement
Telecom Segment – Profit and Loss Statement Euro Millions FY 2016 FY 2015 Sales to Third Parties 1,164 1,109 YoY total growth 4.9% 11.6% YoY organic growth 8.5% 9.9% Adj. EBITDA 163 134 % on sales 14.0% 12.1% Adj. EBIT 123 90 % on sales 10.6% 8.1% Company Presentation – March 2017 31
Slide 32: Dividend proposal
Dividend proposal Dividend proposed to the forthcoming Shareholders’ Meeting Total Shares (1) Dividend Per Share € 0.43 216,720,922 • Ex-dividend date: 24 April 2017 • Record date: 25 April 2017 • Payment date: 26 April 2017 Shares with dividend right (2) DPS evolution (Euro per share) 213,014,694 D
Slide 33: Successful placement of €500m equity-linked bond
Successful placement of €500m equity-linked bond Equity-linked Bond Key Features: • Total amount: € 500 million 1. Finance possible M&A deals • Coupon: Zero Coupon • Initial Conversion Price: €34.2949 (41.25% premium) 2. Fund shares buy-back • Maturity: January 2022 (5 Years) • Redemption at maturit
Slide 34: Agenda
Agenda Group overview Results by business Financial Results Appendix o Prysmian at a glance o OCI Acquisition o Financials o Energy Projects and Energy Products o Telecom Company Presentation – March 2017 34
Slide 35: 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 • West of Adlergrund • BorWin 3 / DolWin 3 • Cyclades • Messina II • Philippines • Mon.Ita.
Slide 36: 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 2016 Cumulated Capacity by Country Cumulated Offshore Wind capacity (L axis) Others 0.2 GW Annual Additional capacity (R axis) Netherlands 1.1 GW 20 22 3.2 Thous
Slide 37: 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 (Export cable Main planned subsea & u
Slide 38: Latest submarine projects awarded
Latest submarine projects awarded Key success factors Latest Key projects Customers Period €m* • Track record and reliability Frence Offshore RTE 2018-20 >300 ElecLink Groupe Eurotunnel 2017-19 79 • Ability to design/execute turnkey COBRA cable TenneT – Energinet.dk 2016-18 250 solution Hainan II Ch
Slide 39: 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 Umbilical Pipes For control Christmas Manifold Tree Petrol Well Company Presentation – March 2017 39
Slide 40: 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 – March 2017 40
Slide 41: 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 42: 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 43: 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 44: 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 45: Agenda
Agenda Group overview Results by business Financial Results Appendix o Prysmian at a glance o OCI Acquisition o Financials o Energy Projects and Energy Products o Telecom Company Presentation – March 2017 45
Slide 46: 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 47: 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 48: Telecom Cables Main Applications
Telecom Cables Main Applications BACKBONE METROPOLITAN RING ACCESS NETWORK Company Presentation – March 2017 48
Slide 49: 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 50: 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 51: 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 52: 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 8,000 2,500 100 2,000 75 6,000 1,500 50 4,000 1,000 25 2,000 J- J- J- J- J- J- J- J- J- J- 500 J- J- J- J- J- J- J- J- J-
Slide 53: 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