Prysmian — Earnings Release 2020

May 12, 2020

First Quarter 2020 Financial Results

MILAN – May 12th, 2020

First quarter 2020 Highlights

Organic sales growth -5.4%	Organic sales at -5.4%, mainly driven by: • Sharp decline as expected in Telecom (-19%), also affected by tough comp with Q1 2019 E&I (-3.4%) mainly driven by T&I (-6.6%) from 2nd • Weak trend in week on March (COVID-related), after a solid start of the year • Strong performance of North America (+3.6%) mainly driven by PD
Adj. EBITDA 197 €M	Adj. EBITDA at 197 €M (7.6% of sales) vs 231 €M in 2019 (8.3% of sales), mainly driven by: • Energy: overall stable E&I with a positive performance in PD offset by T&I • Projects: stable profitability in Underground High Voltage and Submarine. Declining results in Surf (Oil&Gas driven) and Submarine Telecom • Telecom: decline as expected reflecting lower volume and price pressure, partially offset by cost efficiency. Sharp drop of YOFC Q1 results due to COVID-19 impact
Net Financial Debt 2,606 €M	Net Financial Debt at 2,606 €M in line with expectations and business seasonality. Sound cash generation confirmed: LTM Free Cash Flow at 538 €M improving from 433 €M in FY 2019
German Corridors	Prysmian already awarded more than 1 billion € in German Corridors projects: over 500 €M for SuedOstLink (50% of the project) and over 500 M€ for A-Nord (50% of the project)
2020 outlook	2020 guidance announced on the 5th of March withdrawn, on the back of high level of uncertainty, lack of visibility on the duration of the pandemic and on the speed of the demand recovery

Financial Highlights | Euro Millions, % on Sales

Sales & Adj. EBITDA by Business | Euro Millions, % on Sales,

• Organic decline mainly driven by Surf and Submarine Telecom
• COVID constraints expected to affect production output and HV installation mainly in Q2
• Solid tendering activity ongoing

• Improved profitability in PD driven by North America, offset by the decline in T&I strongly impacted by COVID
• Improved profitability, with mixed trend across businesses and regions

Q 1 2 0 1 9 Q 1 2 0 2 0

HIGHLIGHTS

41 45

598 -0.3%

• Resilient OEM and still unaffected Automotive in Q1
• Material drop as expected, due to lower volume and price pressure, partially offset by cost efficiency HIGHLIGHTS

Q 1 2 0 1 9 Q 1 2 0 2 0 18.4% 13.6%

352 -19.0%

8

80

1

48

Telecom

▪ Sharp drop of YOFC Q1 results due to COVID-19 impact

5

Sales & Adj. EBITDA by Geography | Euro Millions, % on Sales

Agenda

Protecting Value and Improving resilience in a challenging environment

Prysmian has implemented the highest Safety and Monitoring standard and Mitigation Actions to manage and control the development of COVID-19

Safeguarde Group employees:

• Preserving permanent employment
• Quick implementation of extraordinary and specific sanitary and hygienic procedures across all sites
• As of today 42 employees tested positive out of 29,000 total
• Remote working fully enabled 2/3 weeks prior to country lockdown
• Supplying 600,000 masks to factories each month

Preserve profitability and cash flow:

• G&A cost containment (-40% on travel; -5/-10% on other fixed costs;)
• Employee measures (HC freeze, salary freeze, travel ban, usage of vacation)
• Temporary lay-off and government furlough
• Rigorous working capital management
• Cutting and postponing Capex

Support operations:

• Responsive Supply Chain Management with daily tracking of operations
• Strong focus on customers support
• Top 150 suppliers daily monitor

Supporting local communities:

• Donations of cables for the construction of Covid-19 hospitals in Italy, China, UK, Brazil
• Donations of protective equipment and medical materials to hospitals in Spain, France, Australia, Romania, Hungary, USA
• Donations by the company and employees to support hospitals and communities

E&I Trading update | Monthly Volume Evolution ²⁰¹⁹

Agenda

Q1 2020 Highlights

Group overview COVID-19 Outlook

Looking Ahead

Enter the pandemic with strong fundamentals (business and geographical mix, strong balance sheet, responsive supply chain, lean organization)

Growth secular drivers unaffected (Energy Transition, Telecommunication Network, Electrification)

Prepared for a challenging Q2

Proven capability and commitment to preserve profitability and cash generation (cost cutting, working capital management, capex spending)

Agenda

Q1 2020 Appendix Highlights

Group overview COVID-19 Outlook

Financial Results

Profit and Loss Statement | Euro Millions

	Q1 2020	Q1 2019
SALES YoY total growth combined YoY organic growth	2,587 (6.6%) (5.4%)	2,771
Adj.EBITDA	197	231
% on sales	7.6%	8.3%
of which share of net income	1	8
Adjustments	(14)	(11)
EBITDA	183	220
% on sales	7.1%	7.9%
Adj.EBIT	117	155
% on sales	4.5%	5.6%
Adjustments	(14)	(11)
Special items	(45)	16
EBIT	58	160
% on sales	2.2%	5.8%
Financial charges	(27)	(38)
EBT	31	122
% on sales	1.2%	4.4%
Taxes	(11)	(33)
% on EBT	35.5%	27.0%
NET INCOME	20	89
% on sales	0.8%	3.2%
Minorities	(3)	1
GROUP NET INCOME	23	88
% on sales	0.9%	3.2%

Adj. EBITDA Bridge
	Q1
ADJ. EBITDA 2019	231
Projects	(3)
Energy	1
Telecom (ex-YOFC)	(25)
YOFC	(7)
ADJ. EBITDA 2020	197

Adjustments and Special Items on EBIT
	Q1 2020	Q1 2019
Restructuring	(6)	(4)
Other Non-operating Income / (Expenses)	(8)	(7)
EBITDA adjustments	(14)	(11)
Special items	(45)	16
Gain/(loss) on metal derivatives	(36)	17
Other	(9)	(1)
EBIT adjustments	(59)	5

Profit and Loss Statement | Euro Millions

	Q1 2020	Q1 2019
SALES YoY total growth combined YoY organic growth	2,587 (6.6%) (5.4%)	2,771
Adj.EBITDA	197	231
% on sales	7.6%	8.3%
of which share of net income	1	8
Adjustments	(14)	(11)
EBITDA	183	220
% on sales	7.1%	7.9%
Adj.EBIT	117	155
% on sales	4.5%	5.6%
Adjustments	(14)	(11)
Special items	(45)	16
EBIT	58	160
% on sales	2.2%	5.8%
Financial charges	(27)	(38)
EBT	31	122
% on sales	1.2%	4.4%
Taxes	(11)	(33)
% on EBT	35.5%	27.0%
NET INCOME	20	89
% on sales	0.8%	3.2%
Minorities	(3)	1
GROUP NET INCOME	23	88
% on sales	0.9%	3.2%

Financial Charges
	Q1 2020	Q1 2019
Net interest expenses	(23)	(22)
of which non-cash conv.bond interest exp.	(2)	(2)
Financial costs IFRS 16	(1)	(1)
Bank fees amortization	(1)	(1)
Gain/(loss) on exchange rates	(12)	(12)
Gain/(loss) on derivatives	11	5
Non recurring effects	(1)	(1)
Other non operating financial income	1	-
Monetary adjustment on provisions	(1)	(2)
Impact Hyperinflationary economies	-	(4)
Net financial charges	(27)	(38)

Statement of financial position (Balance Sheet) | Euro Millions

	31 Mar 2020	(3) 31 Mar 2019	31 Dec 2019
Net fixed assets	5,258	5,286	5,301
of which: goodwill	1,612	1,589	1,590
Net working capital	1,122	1,367	755
of which: derivatives assets/(liabilities)	(61)	6	6
of which: Operative Net working capital	1,183	1,361	749
Provisions & deferred taxes	(737)	(742)	(820)
Net Capital Employed	5,643	5,911	5,236
Employee provisions	487	467	494
Shareholders' equity	2,550	2,544	2,602
of which: attributable to minority interest	180	188	187
Net financial debt	2,606	2,900	2,140
Total Financing and Equity	5,643	5,911	5,236

Cash Flow | Euro Millions

Net debt evolution LTM

+538 €M Free Cash Flow

Prysmian Group Liquidity and Debt Profile

COMFORTABLE LIQUIDITY POSITION:

• Cash on balance at March end in excess of 600 €M plus 1 €Bn of committed Revolving Credit Facility fully unutilized and 400 €M of uncommitted credit lines
• Average debt maturity of 3.1 years with no refinancing needs before 2022

18 (1) excluding 133 €M of debt held by local affiliated, 155 €M coming from IFRS 16 (2) amortization period from 2020 to 2021

Agenda

Performance by Segment | Euro Millions, % on Sales

20

Projects | Euro Millions, % on Sales

Group ~2,500 ~2,800 ~3,200 ~2,400 ~2,450 ~1,900 ~2,040 ~1,870

Energy & Infrastructure | Euro Millions, % on Sales

SALES (5)					HIGHLIGHTS
	-3.4%*	TRADE & INSTALLERS • • POWER DISTRIBUTION	Negative performance driven by EMEA (South Europe) and APAC COVID-19 impact starting form 2nd		week of March
1,310	1,239	• •	Volume stable, positively impacted by North America trend Improvement in profitability thanks to geographical mix and operational efficiency
Q1 2019 * Org. Growth	Q1 2020	OVERHEAD • •	Sound organic growth in Latin America Stable North America
Adj. EBITDA / % of Sales (5)						ADJ.EBITDA AND % SALES
			Adj.Ebitda		Adj.Ebitda margin		±X.X%	= YoY Sales Organic growth
69	68	+2.7%	+3.0%	-3.1%	-0.2%	+2.1%	+0.7%	-3.4%
		4.1%	4.6%	5.1%	4.0%	3.8%	5.8%	5.9%
5.2% Q1 2019	5.5% Q1 2020	108	128	154	130	207	308	307
		2014	2015	2016	2017	2018	2019	Q1 2020 LTM
									22

Industrial & Network Components | Euro Millions, % on Sales

SALES (5)

* Org. Growth

Adj. EBITDA / % of Sales (5)

SPECIALTIES, OEM & RENEWABLES

• Negative trend in Mining, Solar, Infrastructure and Renewables due to CODIV-19, partially offset by Railways and OEM helped by current backlog

HIGHLIGHTS

ELEVATOR

• Negative organic growth driven by APAC.
• North America improvement continued in Q1

AUTOMOTIVE

• Still stable Q1, with worsening trend also due by COVID-19 crisis
• Adj. EBITDA improvement driven by North America

OIL & GAS

• Business benefitting in Q1 from order backlog

NETWORK COMPONENTS

• Stable trend

Telecom | Euro Millions, % on Sales

Cash Flow Statement | Euro Millions

	31 Mar 2020	31 Mar 2019	12 Months (from 1/4/2019 to 31/3/2020)
Adj.EBITDA	197	231	973
Adjustments	(14)	(11)	(103)
EBITDA	183	220	870
Net Change in provisions & others	(44)	(26)	(91)
Share of income from investments in op.activities	(1)	(8)	(17)
Cash flow from operations (before WC changes)	138	186	762
Working Capital changes	(473)	(634)	228
Dividends received	2	1	10
Paid Income Taxes	(15)	(19)	(107)
Cash flow from operations	(348)	(466)	893
Acquisitions/Disposals	-	-	(7)
Net Operative CAPEX	(52)	(36)	(264)
Free Cash Flow (unlevered)	(400)	(502)	622
Financial charges	(9)	(12)	(91)
Free Cash Flow (levered)	(409)	(514)	531
Free Cash Flow (levered) excl. Acquisitions & Disposals	(409)	(514)	538
Dividends	-	(5)	(114)
Capital increase, Shares buy-back & other equity movements	-	-	2
Net Cash Flow	(409)	(519)	419
Net Financial Debt beginning of the period	(2,140)	(2,222)	(2,900)
Net cash flow	(409)	(519)	419
NFD increase due to IFRS16	-	(147)	(64)
Other variations	(57)	(12)	(61)
Net Financial Debt end of the period	(2,606)	(2,900)	(2,606)

Financial Highlights | Euro Millions

		Sales			Adj.EBITDA
	Q1 2020		Q1 2019		Q1 2020		Q1 2019
	€M	organic growth	€M	€M	Adj.EBITDA Margin	€M	Adj.EBITDA Margin
PROJECTS	347	-5.5%	368	36	10.4%	39	10.6%
Energy & Infrastructure	1,239	-3.4%	1,310	68	5.5%	69	5.2%
Industrial & Network Components	598	-0.3%	599	45	7.5%	41	6.9%
Other	51	0.0%	58	-		2	3.2%
ENERGY	1,888	-2.4%	1,967	113	6.0%	112	5.7%
TELECOM	352	-19.0%	436	48	13.6%	80	18.4%
Total Group	2,587	-5.4%	2,771	197	7.6%	231	8.3%

Bridge Consolidation Sales | Euro Millions

Notes

• (1) Adjusted excluding restructuring, non-operating income/expenses and non-recurring income / expenses;
• (2) Defined as NWC excluding derivatives; % on annualized last quarter sales;
• (3) The Q1 2019 figures have been restated due to definition of the purchase price allocation for General Cable, conducted in accordance with the procedures and timing established by IFRS 3 - Business Combinations;

Disclaimer

• The managers responsible for preparing the company's financial reports, A.Brunetti 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 the books, accounting and other records of the company.
• Certain information included in this document is forward looking and is subject to important risks and uncertainties that could cause actual results to differ materially. The Company's businesses include its Projects, Energy and Telecom Operating Segments, and its outlook is predominantly based on its interpretation of what it considers to be the key economic factors affecting these businesses.
• Any estimates or forward-looking statements contained in this document are referred to the current date and, therefore, any of the assumptions underlying this document or any of the circumstances or data mentioned in this document may change. Prysmian S.p.A. expressly disclaims and does not assume any liability in connection with any inaccuracies in any of these estimates or forward-looking statements or in connection with any use by any third party of such estimates or forward-looking statements. This document does not represent investment advice or a recommendation for the purchase or sale of financial products and/or of any kind of financial services. Finally, this document does not represent an investment solicitation in Italy, pursuant to Section 1, letter (t) of Legislative Decree no. 58 of February 24, 1998, or in any other country or state.
• In addition to the standard financial reporting formats and indicators required under IFRS, this document contains a number of reclassified tables and alternative performance indicators. The purpose is to help users better evaluate the Group's economic and financial performance. However, these tables and indicators should not be treated as a substitute for the standard ones required by IFRS.

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