Prysmian — Earnings Release 2021

Mar 1, 2022

Informazione Regolamentata n. 0902-11-2022		Data/Ora Ricezione 01 Marzo 2022 14:22:56	Euronext Milan
Societa'	:	PRYSMIAN
Identificativo Informazione Regolamentata	:	157925
Nome utilizzatore	:	PRYSMIANN05 - Bifulco
Tipologia	:	1.1
Data/Ora Ricezione	:	01 Marzo 2022 14:22:56
Data/Ora Inizio Diffusione presunta	:	01 Marzo 2022 14:22:58
Oggetto	:	Prysmian S.p.A.: full year 2021 results
Testo del comunicato

Vedi allegato.

PRESS RELEASE ‒ RESULTS AT 31 DECEMBER 2021

STRONG GROWTH IN 2021; GUIDANCE EXCEEDED

RECORD €4.8 BILLION PROJECT ORDERS SECURED IN 2021

FY 2022 GUIDANCE: ADJUSTED EBITDA AT €1,010M-€1,080M / FCF ≈ €400M ±15%

• R ¹ ECORD SALES AT €12,736M, ORGANIC GROWTH AT +11.0%
• ADJUSTED EBITDA AT €976M, +16.2% VS 2020 (UPDATED GUIDANCE: €920M–€970M)
• STABLE MARGINS AT 7.7% (8.6% AT 2020 METAL PRICES VS 8.4% IN 2020)
• GROUP NET PROFIT ROSE TO €308M FROM €178M (+73%)
• SOLID PERFORMANCE ACROSS ALL BUSINESSES; STRONG EXECUTION IN PROJECTS IN Q4
• STRONG CASH FLOW GENERATION, FREE CASH FLOW AT €365 M² (VS GUIDANCE OF €300M ± 20%) AND NET DEBT DECREASING TO €1,760M VS €1,986M AT 2020 YEAR-END
• CO² EMISSIONS DECREASED BY 22,1% COMPARED WITH THE BASELINE SET IN 2019 (CERTIFIED BY SBTI)
• PROPOSED DIVIDEND INCREASED TO €0.55 PER SHARE (+10% VS. 2020)

Milan, 1 March 2022. The Board of Directors of Prysmian S.p.A. approved today the Group's consolidated results for 2021³ .

"The recovery trend gained pace at the end of the year, allowing the Group to close 2021 with sharp growth in revenue and exceed the guidance previously announced to the market," stated CEO Valerio Battista. For the first time, sales exceeded €12 billion, a record milestone, and Adjusted EBITDA grew sharply, with stable margins despite significant rises in commodity prices. In particular, our results were driven by the resilience of the Energy business segment and the recovery in Telecom. Flawless execution of submarine cable projects in progress, also led to a recovery in the Projects segment, a business positively exposed to the energy transition, where the Group has reaffirmed its technological and market leadership, acquiring record orders worth approximately €4.8 billion in the year. With the aim of consolidating our position in the US market, we are also planning to build a new submarine cable plant in the USA. We have started 2022 with the same conviction and determination, which includes setting ambitious new targets for the year, with an expected Adjusted EBITDA in the range of €1,010 million to €1,080 million and a free cash flow target of €400 million ±15%," concluded Valerio Battista.

¹ Excluding the Projects segment.

² Excluding cash flows due to acquisitions, disposals and antitrust-related issues.

³³ The Consolidated Financial Statements and Draft Separate Financial Statements are currently still being audited.

This press release is available on the company website at www.prysmiangroup.com and in the mechanism for the central storage of regulated information provided by Spafid Connect S.p.A. at

FINANCIAL RESULTS

Group sales grew to a record €12,736 million, with an organic change of +10.9% (+13,6% in Q4); excluding the Projects segment, the organic change was +11.0%. The Energy business segment confirmed its resilience, with organic growth of +10.7% compared to 2020 and +3.8% compared to 2019, exceeding pre-pandemic levels. Trade & Installer and cables for renewable energy performed particularly well while Power Distribution demonstrated a strong recovery during Q4 in North America. The Telecom segment also benefited from the favourable trends within the US market, reporting +12.7% organic growth. Prysmian's comprehensive execution in submarine cable projects was the main driver for the Projects segment, sharply accelerating in Q4 with a +34.7% increase over the same period of 2020, exceeding the Group's expectations.

Adjusted EBITDA rose by +16.2% to €976 million, exceeding the Group's upper range of expectations and revised guidance of €920-€970 million. There was also a strong acceleration in Q4, with Adjusted EBITDA reaching €251 million (the best fourth quarter performance ever in the Group's history). Exchange rates generated a negative impact of approximately €11 million during 2021. The Group result, net of the cumulative exchange rate effect in the two years (equal to €55 million) was higher than in 2019. Margins remained substantially stable, despite the impact of increasing metal prices, with the ratio of Adjusted EBITDA to Sales at 7.7% (8.6% restated at 2020 metal prices) compared to 8.4% in 2020. The Energy segment confirmed its resilience, particularly in terms of profitability, driven by the Trade & Installers' crucial contribution, with Power Distribution also showing signs of a recovery in Q4, driven by US demand. Margins remained stable across the Telecom segment, due to efficiency-building measures and an enhanced product mix. The Projects segment recovered markedly, reporting an increased Adjusted EBITDA mainly driven by a record Q4 performance.

EBITDA was €927 million (€781 million in 2020), net of costs for company reorganisations, non-recurring expenses and other non-operating expenses totalling €49 million (€59 million in 2020). These adjustments mainly included non-operating costs for €26 million and reorganisation charges for €21 million.

Operating income amounted to €572 million, compared to €353 million in 2020.

Net profit attributable to owners of the parent rose to €308 million compared to €178 million in the previous year.

Free Cash Flow before acquisitions and divestments stood at €365 million (also excluding antitrust related flows), exceeding the guidance.

Despite having paid dividends of €134 million, the strong cash flow generation resulted in significant reduction of Net Financial Debt, which amounted to €1,760 million at year end (€1,986 million at 31 December 2020). The significant deleverage was achieved thanks to solid cash generation of €365 million, excluding outflows from acquisitions and disposals amounting to €93 million and as cash inflow of €58 million related to an antitrust settlement agreement.

The factors that allowed this level of cash generation:

• operating cash flows before changes in net working capital amounting to €883 million;
• cash outflows due to restructuring costs amounting to €24 million;
• cash outflows due to the €28 million increase in net working capital;
• net investment amounting to €275 million;
• net finance costs amounting to €79 million;
• paid taxes amounting to €120 million;
• collection of dividends from affiliates totalling €8 million.

CONSOLIDATED HIGHLIGHTS

(in millions of Euro)

	2021	2020	Change %	% organic sales(*)
Sales	12,736	10,016	27.1%	11.0%
Adjusted EBITDA before share of net profit/(loss) of equity-accounted companies	958	822	16.5%
Adjusted EBITDA	976	840	16.2%
EBITDA	927	781	18.7%
Adjusted operating income	647	515	25.6%
Operating income	572	353
Profit/(Loss) before taxes	476	252
Net profit/(loss) for the period	310	174
Net profit attributable to owners of the parent	308	178

*Excluding Projects

(in millions of Euro)

	31 December 2021	31 December 2020	Change
Net fixed assets	5,304	4,971	333
Net working capital	650	523	127
Provisions and net deferred taxes	(659)	(579)	(80)
Net Capital Employed	5,295	4,915	380
Employee provisions	446	506	(60)
Shareholders' equity	3,089	2,423	666
of which: attributable to minority interest	174	164	10
Net financial debt	1,760	1,986	(226)
Total financing and equity	5,295	4,915	380

2021 CONSOLIDATED DISCLOSURE OF NON-FINANCIAL INFORMATION: IMPROVED ENVIRONMENTAL PERFORMANCE

The Board of Directors approved the Consolidated Disclosure of Non-financial Information (DNF) complying with Legislative Decree 254/16, with specific regard to environmental, social and personnel aspect, respect for human rights and the fight against active and passive corruption.

The total economic value generated, namely the overall wealth created by the Group for all stakeholders, stood at €13,484 million in 2021 (€10,273 million in 2020) 4 . The creation of shareholder value is shown by the Total Shareholders' Return, which amounted to +196%, achieved since listing.

Environmental performance improved as a result of the efficiency actions undertaken:

• CO² emissions amounted to 678,000 t eq. in 2021 (870,000 t eq. in 2019, down -22,1% on the 2019 baseline) - Scope 1 and Scope 2 market based;
• total recycled waste was stable at 69%;
• 20.9% of cables assessed using ECO CABLE CRITERIA (vs 1% in 2020).

In 2021, the Group improved its positioning in the main sustainability indexes, ranking first with a score of 87/100 in the ELQ Electrical Components & Equipments of the Dow Jones Sustainability World, also confirming its inclusion in other indices, i.e., FTSE4Good (3.8/5), MSCI (AA), Bloomberg and STOXX Global ESG Index. Prysmian also achieved Ecovadis' Platinum level and maintained a good level in the CDP Climate Change ESG index (B).

⁴ Formed by: Spending on Suppliers, Payment to Staff, Payment to Lenders, Payment to the Public Administration, Contributions to Communities.

This press release is available on the company website at www.prysmiangroup.com and in the mechanism for the central storage of regulated information provided by Spafid Connect S.p.A. at

PROJECTS

• ORGANIC GROWTH AND MARGINS IMPROVED. STRONG EXECUTION IN Q4
• RECORD €4.8 BN ORDERS SECURED, THANKS TO TECHNOLOGICAL LEADERSHIP AND OPERATING CAPABILITIES
• TESTS COMPLETED SUCCESSFULLY, CABLE PRODUCTION FOR THE GERMAN CORRIDORS STARTED
• SITE IN MASSACHUSETTS ACQUIRED FOR THE NEW SUBMARINE CABLE FACTORY IN THE US

Sales in the Projects segment amounted to €1,594 million in 2021, with a +10.2% organic change compared to 2020, sharply accelerating in Q4, which posted a +34.7% organic growth. Adjusted EBITDA rose to €210 million (€186 million in 2020), slightly improving in terms of profitability: ratio of Adjusted EBITDA to sales at 13.2% compared to 13.0% in 2020.

The positive organic growth reported by the Projects segment was mainly attributable to the excellent execution of Submarine Power Cables projects in H2, and particularly in the last three months. The key projects under execution in the reporting period were the Crete-Peloponnese region and Crete-Attica interconnection projects in Greece; the link between Great Britain and Denmark (Viking Link); the offshore wind farm projects in France and in Germany (Dolwin5).

The Group took some key steps forward in the plan of a new submarine power cable plant in the United States. At beginning of 2022 the acquisition of a site in Massachusetts, a State intended to become a hub for the development of the offshore wind industry in the USA, was finalized.

In the High Voltage Underground Cables business, after successfully completing the qualification tests, the production of 525 kV P-Laser cables for the German Corridors was launched, with the manufacturing of the first 80 km of cables.

In 2021, the Group's technological leadership and execution capabilities allowed it to secure submarine and land cable projects for a total of approximately € 4.8 billion. At 31 December 2021, the Group's total order book was at a record €4.4 billion, considering exclusively the contracts for which the Notice to Proceed had already been issued. In the United States the group achieved a prominent position both in the offshore wind farm industry — through the acquisition of the Commonwealth Wind and Park City Wind projects and in the high voltage underground sector with the SOO Green project.

(in millions of Euro)
	2021	2020	Change %
Sales	1,594	1,438	10.8%
% organic sales change	10.2%
Adjusted EBITDA	210	186	12.4%
% of sales	13.2%	13.0%

ENERGY

• ENERGY CONFIRMED ITS RESILIENCE. SOUND ORGANIC GROWTH AND STABLE MARGINS
• POSITIVE PERFORMANCE OF TRADE & INSTALLER; POWER DISTRIBUTION RECOVERED IN Q4 IN THE US
• OEM AND RENEWABLES ROSE SHARPLY IN THE INDUSTRIAL CABLES SEGMENT

Sales of the Energy segment rose to €9,557 million (+10.7% organic change on 2020), also exceeding the 2019 pre-pandemic levels. Adjusted EBITDA stood at €546 million (€440 million in 2020), showing a strong resilience also in terms of profitability and with a ratio of Adjusted EBITDA to Sales of 5.7% (6.6% at 2020 metal prices) compared to 6.1% in 2020.

(in millions of Euro)

	2021	2020	Change %
Sales	9,557	7,207	32.6%
% organic sales change	10.7%
Adjusted EBITDA	546	440	24.1%
% of sales	5.7%	6.1%

Energy & Infrastructure

Sales of the Energy & Infrastructure business amounted to €6,361 million, marking a positive organic change of +12.3% compared to 2020, mainly attributable to Trade & Installers' excellent performance, whereas Power Distribution recovered in Q4, triggered by US demand. Profitability remained stable, thanks to volume recovery and industrial efficiencies, as well as to the price rises and positive product mix that offset the increase in costs of most of commodities. Adjusted EBITDA was €356 million (€275 million in 2020), with a ratio to Sales at 5.6% (6.4% at 2020 metal prices).

Industrial & Network Components

Industrial & Network Components sales amounted to €2,838 million, with a +8.4% organic change compared to 2020. Adjusted EBITDA was €196 million (€166 million in 2020), with a good margin resilience (ratio to sales at 6.9% compared to 7.4% in 2020; 7.8% at 2020 metal prices). In the Specialties market, the Group reported a positive organic growth and good profitability. With regard to Elevators, the acquisition of EHC in January 2021 enabled the Group to complement its portfolio with vertical mobility solutions. The Automotive business reported a positive organic growth in all geographical areas, recovering both volumes and profitability, as it had done as of the fourth quarter of 2020. The Network Components business area recovered to pre-Covid-19 levels, mainly driven by the European medium voltage segment.

TELECOM

• STRONG ORGANIC GROWTH, MAINLY THANKS TO THE US MARKET
• ACCELERATION OF TECHNOLOGICAL INNOVATION THANKS TO THE NEW GENERATION OF MINIATURISED OPTICAL CABLES FOR FTTX AND 5G NETWORKS

Sales of the Telecom segment amounted to €1,585 million, with an organic change of +12.7%. Adjusted EBITDA was €220 million (€214 million in 2020), with a ratio of Adjusted EBITDA to Sales at 13.9% compared to 15.6% in 2020 (14.1% at 2020 metal prices).

Organic growth was chiefly attributable to the recovery of the fibre optic cable demand in North America, although positive signs were also recorded in South Europe. In terms of profitability, the cost containment and efficiency-building measures, along with the product mix, allowed to partially mitigate the impact of price pressure.

In Europe, the destocking policy launched by the main European players in 2020 was replaced by a gradual volume recovery.

With regards to technological innovation, it should be noted that the new generation of miniaturised bendsensitive optical cables using BendBrightXS 180μm fibre was launched. It is a record cable in terms of fibre density and small diameter, specially designed for FTTx and 5G networks.

The high value-added market segment of optical connectivity accessories continued to perform well, fuelled by the development of new FTTx networks (last mile broadband access), in particular in Great Britain.

The Multimedia Solutions business showed a positive organic growth due to the volume recovery in the North American market.

(in millions of Euro)
	2021	2020	Change %
Sales	1,585	1,371	15.6%
% organic sales change	12.7%
Adjusted EBITDA	220	214	2.9%
% of sales	13.9%	15.6%

PERFORMANCE BY GEOGRAPHICAL AREA: EXCELLENT PERFORMANCE IN LATAM, RECOVERY OF ENERGY AND TELECOM IN EMEA, SOLID TREND OF THE T&I BUSINESS IN NORTH AMERICA (*)

EMEA

Sales in the EMEA area amounted to €5,272 million in 2021, with a +9.3% organic change. Adjusted EBITDA was €265 million (compared to €197 million in 2020). Adjusted EBITDA ratio to sales was 5% (5.3% considering 2020 metal prices) compared to 4.8% in 2020. These results were attributable to the recovery witnessed by the Energy (above all in the Trade & Installers business) and Telecom segments. Industrial & Network Components grew sharply, driven by Renewables (+21.7%).

North America

Sales in this area in 2021 amounted to €3,808 million, with a +10.2% organic change compared to the previous year. Adjusted EBITDA stood at €336 million (€345 million in 2020), negatively impacted by an unfavourable exchange rate trend for €11 million. The Adjusted EBITDA ratio to sales was 8.8% (10.3% at 2020 metal prices), compared to 11.4% for the previous year. The T&I and Renewables business recorded a solid trend. In Q4 the Power Distribution business recovered after being impacted by the rise in raw material prices in the first nine months of the year.

LatAm

Sales of the LatAm area totalled €1,060 million, with a +23.8% organic change. Adjusted EBITDA stood at €99 million (€64 million in 2020), with a ratio of Adjusted EBITDA to Sales at 9.4% (11.8% considering the metal price of 2020) compared to 8.9% in 2020. Performance was excellent, mainly thanks to Construction and Renewables. The Adjusted EBITDA improvement was also attributable to the T&I business.

Asia Pacific

Sales in Asia Pacific amounted to €1,002 million in 2021, with a +9.6% organic change. Adjusted EBITDA was €66 million (€48 million in 2020), with a positive impact of exchange rates for € million. The ratio of Adjusted EBITDA to sales was 6.6% (7.4% considering the metal price of 2020) compared to 6.4% in the previous year. The robust results were due to the contribution of China.

		Sales		Adjusted EBITDA
	2021	2020	2021	2020
EMEA	5,272	4,097	265	197
North America	3,808	3,016	336	345
Central-South America	1,060	723	99	64
Asia and Oceania	1,002	742	66	48
Total (excluding Projects)	11,142	8,578	766	654
Projects	1,594	1,438	210	186
Total	12,736	10,016	976	840

(in millions of Euro)

(*) Data by geographical area are stated excluding the Projects segment.

FURTHER BOARD OF DIRECTORS' RESOLUTIONS

Notice of Calling of Annual General Meeting and proposed dividend distribution

The Board of Directors resolved to call the Ordinary and Extraordinary Shareholder' Meeting for Tuesday, 12 April 2022 (single call).

Based on the results for 2021, the Board of Directors will recommend to the forthcoming AGM that a dividend of €0.55 per share be distributed, involving a total pay-out of approximately €145 million. If approved, the dividend will be paid out from 21 April 2022, with record date on 20 April 2022 and exdividend date on 19 April 2022.

The AGM will also resolve upon, inter alia, the appointment of the Board of Statutory Auditors and the remuneration of the members of the Board of Statutory Auditors, by means of a list voting mechanism, on the basis of the proposals to be submitted by those entitled to vote.

Plan for the assignment of shares to group employees

Having heard the favourable opinion of the Remuneration and Nomination Committee, the Board of Directors resolved to submit for approval to the General Shareholders' Meeting, pursuant to Article 114 bis, paragraph 1, of Legislative Decree 58/98, a share-based plan reserved for employees of Prysmian and Prysmian Group companies who are not involved in the current annual or long-term individual incentive schemes (potentially more than 25,000 blue and white collar workers).

The plan, which will be implemented over a three-year period and will be the subject of consultation with the relevant trade union representatives at local level (where required), is configured as a portion of variable remuneration linked to earnings growth and paid out in the form of equity, with the aim of gradually increasing the already significant proportion of employed personnel who are also shareholders of the company, currently around 35%. At the heart of this initiative is inclusion and sharing, an effort to involve the workforce in the creation of value the Group intends to achieve in the coming years, by leveraging the accelerated pace towards energy transition and digital transformation. Last but not least, it is also the ambition to increase the engagement, trust and loyalty of the workforce to the Company, amid difficult conditions that at times are affecting several of our target markets. The plan provides for the assignment of ordinary shares of the Company to the participants free of charge, at the terms and conditions envisaged by the Plan and described in the information document required by Article 84-bis of Consob Regulation No. 11971/99, which will be made public within the established time limits. The shares under the plan are expected to originate from a capital increase to be carried out using profits or retained earnings, pursuant to Article 2349 of the Italian Civil Code, as well as possibly treasury shares. Considering the potential participants in the Plan, this is not to be considered "of special importance" pursuant to the aforementioned Article 84-bis, paragraph 2, of Consob Regulation.

Capital increases to cover share-based plans in favour of Prysmian Group employees

The Board of Directors resolved to submit a proposal to the extraordinary session of the Shareholders' Meeting for a share capital increase of a maximum amount of €300,000.00; the increase is to be effected by issuing, also in several tranches, a maximum of 3,000,000 new ordinary shares with a nominal value of €0.10, to be assigned free of charge, by allocating, pursuant to Article 2349 of the Italian Civil Code, a corresponding amount from the "Reserve for share issues pursuant to Article 2349 of the Italian Civil Code", to employees of Prysmian S.p.A. and Prysmian Group companies, who are beneficiaries of the approved plan for the assignment of shares that will be submitted for approval to the same Shareholders' Meeting in ordinary session.

However, in order to keep the total number of new shares to be issued under employee share-based plans unchanged, the Board of Directors resolved to submit to the extraordinary session of the Shareholders' Meeting also a reduction in the capital increase covering the 2020-2022 incentive plan, already approved by the Shareholders' Meeting on 28 April 2020, from the current maximum nominal amount of €1,100.000.00, (corresponding to 11,000,000 new ordinary shares), to a maximum nominal amount of €800,000.00 (corresponding to 8,000,000 new ordinary shares).

Share buy-back plan

The Board of Directors decided to submit to the forthcoming AGM a request for the authorisation to buy back and dispose of treasury shares. The authorisation requested establishes that the total number of shares that can be purchased, in one or more tranches, cannot exceed the 10% of the share capital at any time. Treasury shares may be purchased within the limits of available reserves recognised from time to time in the most recently approved annual financial statements. The plan has a maximum term of 18 months, commencing from the date of authorisation by the AGM. The said authorisation will be requested to:

• a) create the Company's portfolio of treasury shares (so-called "stock of shares") that can be used in any extraordinary transactions (e.g., mergers, de-mergers, purchase of equity investments) and to implement the remuneration policies approved by the Shareholders' Meeting and adopted by Prysmian Group;
• b) use the treasury shares acquired by exercising the rights ensuing from debt instruments, whether convertible or exchangeable for financial instruments issued by the Company, its subsidiaries or third-parties (e.g., takeover bids and/or share swaps);
• c) dispose of own shares in service of share-based incentive plans or share ownership plans reserved for Prysmian Group's directors and/or employees;
• d) ensure effective management of the Company's share capital, by creating investment opportunities also on the basis of available liquidity.

The buy-back and disposal of treasury shares will be performed in compliance with applicable laws and regulations in force:

• i. at a minimum price of no more than 10% below the stock's official price during the trading session on the day before each transaction is undertaken;
• ii. at a maximum price of no more than 10% above the stock's official price during the trading session on the day before each individual transaction is undertaken.

At today's date, Prysmian S.p.A. directly and indirectly holds 4,652,868 treasury shares.

All relevant documentation required under applicable regulations will be made available to shareholders and the public in the manner and within the terms set forth by applicable laws and regulations.

Bonds

• On 25 January 2021, the Board of Directors resolved to place the equity-linked bond known as "Prysmian S.p.A. €750 million Equity Linked Bonds due 2026". The Shareholders' Meeting of 28 April 2021 approved the convertibility of the aforementioned bond;
• The unrated 7-year bond placed with institutional investors on 30 March 2015 for a total nominal amount of €750 million will mature on 11 April 2022.

OUTLOOK

During 2021, there was a noticeable recovery in the global economy following the easing of pandemicrelated restrictions in the wake of accelerated vaccination campaigns. The recovery was also supported by national plans to support the development of infrastructure projects, energy transition and digitalisation. The strong recovery in economic activity was accompanied by significant inflation pressures, mainly driven by rising energy and commodity prices and continuing disruptions in supply chains. Towards the end of 2021, some central banks showed confidence in the economic recovery and began withdrawing some monetary stimulus measures, also with a view to containing rising inflation.

After a 3.1% contraction in 2020, the global economy is expected to grow by 5.9% in 2021 and 4.4% in 2022 according to most recent estimates from the International Monetary Fund. Although there are positive economic growth expectations for the future, a number of short-term uncertainties persist, not least in the face of persistent inflationary pressures fuelled by disruptions in supply chains, rising commodity and energy prices, and developments of the pandemic. Growing geopolitical tensions in Ukraine are a further element of instability.

The results for FY 2021 testify to the Prysmian Group's focus on proactively and seamlessly serving its customers and efficiently managing its industrial footprint. This is evidenced by the results achieved by the Energy business, which exceeded pre-pandemic levels, with a significant improvement in margins when excluding the effect of higher metal prices on revenues, and by the record amount of approximately €4.8 billion of new orders awarded in 2021 to the Projects business.

This favourable trend is seemingly continuing at the outset of 2022. For the full year 2022 Prysmian Group expects moderate demand growth in the construction and industrial cables businesses after last year's excellent performance, with earnings also supported by the ability to implement pricing policies to contain inflation-driven cost pressures.

In the high voltage underground and submarine cables and systems business, the Group aims to confirm its leadership on the market which is expected to show strong growth, driven by the development of offshore wind farms and interconnections to support the energy transition, as well as the start of a trend of significant market growth in the United States, where the Group has decided to expand its production capacity of submarine cables. For this segment, the Group expects results to be up on the previous year, thanks to a solid order book and increased capacity utilisation in the submarine cable business. In the Telecom segment, the Group expects volumes to grow in the optical business, amid a challenging competitive environment, especially in Europe.

Prysmian Group's long-term growth drivers are confirmed, mainly linked to the energy transition, the strengthening of telecommunications networks (digitalisation) and the electrification process. The Group can also leverage its broad business and geographical diversification, solid capital structure, efficient and flexible supply chain and lean organisation, all of which is enabling it to effectively seize growth opportunities.

In light of the above considerations, the Group expects to achieve Adjusted EBITDA in the range of €1,010- 1,080 million in 2022, a significant improvement on the €976 million reported in 2021. In addition, the Group expects to generate cash flows of approximately €400 million ± 15% (FCF before acquisitions and disposals) for FY 2022.

These forecasts do not include any negative impacts resulting from the military conflict in Ukraine and assume no major changes will occur in the evolution of the health emergency and, consequently, no further disruptions and slowdowns in global economic activity. In addition, the higher part of the range of Adjusted EBITDA and cash flow targets is based on the assumption of a stability of the current favourable market conditions, especially in the United States. Moreover, the forecasts are based on the Company's current business scope, on a EUR/USD exchange rate of 1.15, and do not include impacts on cash flow related to Antitrust issues.

The Draft Financial Statements of Prysmian S.p.A. and the Consolidated Financial Statements at 31 December 2021 approved today by the Board of Directors will be made available to the public by the terms and conditions provided for by applicable law in force at the Company's registered office in Via Chiese 6, Milan. They will also be made available, by the same terms and conditions, on the corporate website www.prysmiangroup.com, on the website of Borsa Italiana S.p.A www.borsaitaliana.it, and in the authorised central storage mechanism used by the Company at www.emarketstorage.com. This document may contain forward-looking statements relating to future events and future operating, economic and financial results of Prysmian Group. By their nature, forward-looking statements involve risk and uncertainty because they depend on the occurrence of future events and circumstances. Therefore, actual results may differ materially from those reflected in forward-looking statements due to a variety of factors. The managers responsible for preparing corporate accounting documents (Stefano Invernici and Alessandro Brunetti) hereby declare, pursuant to Article 154-bis, paragraph 2 of Italy's Unified Financial Act, that the accounting information contained in this press release corresponds to the underlying documents, accounting books and records.

EBITDA means the operating result gross of the effect of the change in the fair value of derivatives on raw material prices, other items measured at fair value, amortization, depreciation and write-downs. The function of this indicator is to present the Group's operating profitability situation before the main non-monetary items. Adjusted EBITDA means the EBITDA described above calculated before charges and income relating to corporate reorganizations, charges and income considered to be of a non-recurring nature as indicated in the consolidated income statement and other nonoperating income and expenses. The function of this indicator is to present a situation of operating profitability of the Group before the main non-monetary items, without the economic effects of events considered unrelated to the current management of the Group itself;

The results at 31 December 2021 will be presented to the financial community during a conference call to be held today at 16:00 CEST, a recording of which will be subsequently made available on the Group's website: www.prysmiangroup.com. The documentation used during the presentation will be available today in the Investor Relations section of the Prysmian website at www.prysmiangroup.com and can be viewed on the Borsa Italiana website www.borsaitaliana.it and in the central storage mechanism at .

Prysmian Group

Prysmian Group is world leader in the energy and telecom cable systems industry. With 140 years of experience, sales of over €12 billion, about 30,000 employees in over 50 countries and 108 plants, the Group is strongly positioned in high-tech markets and offers the widest possible range of products, services, technologies and know-how. It operates in the businesses of underground and submarine cables and systems for power transmission and distribution, of special cables for applications in many different industries and of medium and low voltage cables for the construction and infrastructure sectors. For the telecommunications industry, the Group manufactures cables and accessories for voice, video and data transmission, offering a comprehensive range of optical fibres, optical and copper cables and connectivity systems. Prysmian is a public company, listed on the Italian Stock Exchange in the FTSE MIB index.

Lorenzo Caruso Maria Cristina Bifulco

Ph. 0039 02 6449.1 Ph. 0039 02 6449.1

Media Relations Investor Relations

VP Communication & Non-Financial Reporting Chief Sustainability Officer and Group Investor Relations Director

lorenzo.caruso@prysmiangroup.com mariacristina.bifulco@prysmiangroup.com

ANNEX A

Consolidated Statement of Financial Position

(in millions of Euro)

	31 December 2021	31 December 2020
Non-current assets
Property, plant and equipment	2,794	2,648
Goodwill	1,643	1,508
Other intangible assets	494	489
Equity-accounted investments	360	312
Other investments at fair value through other comprehensive	13
income		13
Financial assets at amortised cost	3	4
Derivatives	105	44
Deferred tax assets	182	207
Other receivables	34	30
Total non-current assets	5,628	5,255
Current assets
Inventories	2,054	1,531
Trade receivables	1,622	1,374
Other receivables	627	492
Financial assets at fair value through income statement	244	20
Derivatives	128	82
Financial assets at fair value through other comprehensive	11
income		11
Cash and cash equivalents	1,702	1,163
Total current assets	6,388	4,673
Assets held for sale	-	2
Total assets	12,016	9,930
Equity
Share capital	27	27
Reserves	2,580	2,054
Net result attributable to the Group	308	178
Equity attributable to the Group	2,915	2,259
Share capital and reserves attributable to non-controlling	174	164
interests
Total equity	3,089	2,423
Non-current liabilities
Borrowings from banks and other lenders	2,606	3,045
Employee benefit obligations	446	506
Provisions for risks and charges	46	39
Deferred tax liabilities	188	195
Derivatives	26	13
Other payables	6	6
Total non-current liabilities	3,318	3,804
Current liabilities
Borrowings from banks and other lenders	1,123	127
Provisions for risks and charges	607	552
Derivatives	42	46
Trade payables	2,592	1,958
Other payables	1,191	995
Current tax payables	54	25
Total current liabilities	5,609	3,703
Liabilities held for sale	-	-
Total liabilities	8,927	7,507
Total equity and liabilities	12,016	9,930

Consolidated Income Statement

(in millions of Euro)
	2021	2020
Sales	12,736	10,016
Change in inventories of finished goods and work in progress	229	69
Other income	125	99
Total sales and income	13,090	10,184
Raw materials, consumables used and goods for resale	(8,906)	(6,464)
Fair value change in metal derivatives	13	(4)
Personnel costs	(1,486)	(1,409)
Amortisation, depreciation, impairment and impairment reversal	(335)	(393)
Other expenses	(1,831)	(1,579)
Share of net profit/(loss) of equity-accounted companies	27	18
Operating income	572	353
Finance costs	(785)	(569)
Finance income	689	468
Result before taxes	476	252
Taxes	(166)	(78)
Net Result	310	174
Of which:
attributable to non-controlling interests	2	(4)
attributable to the Group	308	178
Basic earnings/(loss) per share (in Euro)	1.17	0.68
Diluted earnings/(loss) per share (in Euro)	1.17	0.68

Consolidated Statement of Comprehensive Income

(in millions of Euro)

	2021	2020
Net profit/(loss)	310	174
Other comprehensive income:
A) Change in cash flow hedge reserve:	63	55
- Profit/(loss) for the year	83	78
- Taxes	(20)	(23)
B) Change in currency translation reserve	292	(358)
C) Actuarial gains/(losses) on employee benefits (*):	51	(19)
- Profit/(loss) for the year	60	(28)
- Taxes	(9)	9
Total other comprehensive income (A+B+C):	406	(322)
Total comprehensive income/(loss)	716	(148)
Of which:
Attributable to non-controlling interests	13	(20)
Group share	703	(128)

(*) The Statement of Comprehensive Income items which cannot be restated in the net result of the year in subsequent periods

Consolidated Statement of Cash Flows

(in millions of Euro)

		2021	2020
	Profit/(loss) before taxes	476	252
	Amortisation, depreciation and impairment	335	393
	Net gains on disposal of property, plant and equipment	(2)	(20)
	Share of net profit/(loss) of equity-accounted companies	(27)	(18)
	Dividends received from equity-accounted companies	8	8
	Share-based payments	33	31
	Fair value change in metal derivatives	(13)	4
	Net finance costs	96	101
	Changes in inventories	(449)	(101)
	Changes in trade receivables/payables	398	13
	Changes in other receivables/payables	23	347
	Change in employee benefit obligations	(15)	(13)
	Change in provisions for risks and other movements	34	(150)
	Net income taxes paid	(120)	(142)
A.	Cash flow from operating activities	777	705
	Cash flow from acquisitions and/or disposals	(85)	(5)
	Investments in property, plant and equipment	(258)	(240)
	Disposals of property, plant and equipment	8	9
	Investments in intangible assets	(25)	(22)
	Investments in financial assets at fair value through profit or	(224)	(3)
	loss
	Disposals of financial assets at fair value through profit or	-	2
	loss
	Disposals of financial assets at amortised cost	2	-
	Divestment of associates	-	9
B.	Cash flow from investing activities	(582)	(250)
	Capital contributions and other changes in equity	1	1
	Dividend distribution	(134)	(70)
	Proceeds of new loans	844	-
	Repayments of loans	(269)	(117)
	Changes in other net financial receivables/payables	(28)	(53)
	Net finance costs paid	(79)	(86)
C.	Cash flow from financing activities	335	(325)
D.	Exchange (losses) gains on cash and cash equivalents	8	(36)
E.	Net increase/(decrease) in cash and cash equivalents (A+B+C+D)	538	94
F.	Cash and cash equivalents at the beginning of the year	1,164	1,070
G.	Cash and cash equivalents at the end of the year (E+F)	1,702	1,164
	Cash and cash equivalents presented in consolidated statement of financial position	1,702	1,163
	Cash and cash equivalents presented in assets held for sale	-	1

ANNEX B

Reconciliation table between Net result, EBITDA and adjusted EBITDA of the Group

(in millions of Euro)
	2021	2020
Net result	310	174
Taxes	166	78
Finance income	(689)	(468)
Finance costs	785	569
Amortisation, depreciation, impairment and impairment reversal	335	393
Fair value change in metal derivatives	(13)	4
Fair value change in stock options	33	31
EBITDA	927	781
Company reorganization	21	32
Non-recurring expenses/(income)	2	9
Other non-operating expenses/(income)	26	18
Total adjustments to EBITDA	49	59
Adjusted EBITDA	976	840

Statement of Cash Flows with reference to change in net financial position

(in millions of Euro)

	2021	2020	Change
EBITDA	927	781	146
Changes in provisions (including employee benefit obligations) and other movements	19	(163)	182
Net gains on disposal of property, plant and equipment and intangible assets	(2)	(20)	18
Share of net profit/(loss) of equity-accounted companies	(27)	(18)	(9)
Net cash flow from operating activities (before changes in net working capital)	917	580	337
Changes in net working capital	(28)	259	(287)
Taxes paid	(120)	(142)	22
Dividends from investments in equity-accounted companies	8	8	-
Net cash flow from operating activities	777	705	72
Cash flow from acquisitions and/or disposals	(93)	(5)	(88)
Net cash flow used in operating investing activities	(275)	(244)	(31)
Free cash flow (unlevered)	409	456	(47)
Net finance costs	(79)	(86)	7
Free cash flow (levered)	330	370	(40)
Dividend distribution	(134)	(70)	(64)
Capital contributions and other changes in equity	1	1	-
Net cash flow provided/(used) in the year	197	301	(104)
Opening net financial debt	(1,986)	(2,140)	154
Net cash flow provided/(used) in the year	197	301	(104)
Equity component of Convertible Bond 2021	49	-	49
Partial redemption of Convertible Bond 2017	(13)	-	(13)
Increase in net financial debt for IFRS 16	(63)	(79)	16
Net financial debt from Acquisitions and Disposals	8	-	8
Other changes	48	(68)	116
Closing net financial debt	(1,760)	(1,986)	226

ANNEX C

Statement of financial position of Prysmian S.p.A.

(in Euro)

	31 December 2021	31 December 2020
Non-current assets
Property, plant and equipment	91,073,444	89,631,033
Intangible assets	126,838,617	124,589,988
Investments in subsidiaries	5,719,976,842	5,367,293,696
Derivatives	-	-
Deferred tax assets	9,400,192	12,810,200
Other receivables	96,529,880	43,431,004
Total non-current assets	6,043,818,975	5,637,755,921
Current assets
Trade receivables	224,766,271	180,704,286
Other receivables	110,065,881	89,695,930
Financial assets at fair value through profit or loss	199,608,525	-
Derivatives	55,257	302,523
Cash and cash equivalents	100,097,408	250,108
Total current assets	634,593,342	270,952,847
Total assets	6,678,412,317	5,908,708,768
Equity:
Share capital	26,814,425	26,814,425
Reserves	2,129,080,464	2,101,692,394
Net result	138,966,969	80,476,123
Total equity	2,294,861,858	2,208,982,942
Non-current liabilities
Borrowings from banks and other lenders	2,455,672,985	2,904,536,317
Employee benefit obligations	7,283,947	7,253,442
Derivatives	2,547,820	12,293,989
Other payables	281,059	3,610
Total non-current liabilities	2,465,785,811	2,924,087,358
Current liabilities
Borrowings from banks and other lenders	1,021,702,243	31,021,591
Provisions for risks and charges	37,771,967	26,482,257
Derivatives	6,800,066	6,716,797
Trade payables	562,306,414	421,106,006
Other payables	276,213,575	290,311,817
Current tax payables	12,970,383	-
Total current liabilities	1,917,764,648	775,638,468
Total liabilities	4,383,550,459	3,699,725,826
Total equity and liabilities	6,678,412,317	5,908,708,768

Income statement of Prysmian S.p.A.

(in Euro)

	2021	2020
Sales and Other incomes	292,852,059	193,552,757
Raw materials, consumables used and goods for resale	(7,000,417)	(4,439,240)
Fair value change in metal derivatives	(242.806)	262,027
Personnel costs	(64,151,494)	(61,447,854)
Amortisation, depreciation, impairment and impairment reversal	(29,637,006)	(22,893,075)
Other expenses	(165,100,130)	(117,276,040)
Operating income	26,720,206	(12,241,425)
Finance costs	(80,112,904)	(73,922,837)
Finance income	65,562,750	45,877,165
Dividends from subsidiaries	153,550,924	144,441,360
(Impairment)/Reversal of impairment of investments	(5,000,000)	(32,500,000)
Result before taxes	160,720,976	71,654,263
Taxes	(21,754,007)	8,821,860
Net result	138,966,969	80,476,123

Statement of Comprehensive Income of Prysmian S.p.A.

(in thousand Euro)

	2021	2020
Net result	138,967	80,476
Other components of comprehensive income/(loss) for the year:
A) Change in the Cash Flow Hedge reserve:	7,427	2,252
- Gross of tax	9,773	2,964
- Tax effect	(2,346)	(711)
B) Actuarial gains/(losses) on employee benefits (*):	(230)	(86)
- Gross of tax	(303)	(113)
- Tax effect	73	27
Total other components of comprehensive income/(loss) for the year (A+B)	7,197	2,166
Total comprehensive result	146,164	82,643

(*) Statement of Comprehensive Income items that cannot be restated in net result for the year in subsequent periods.

Statement of cash flows of Prysmian S.p.A.

(in Euro)

	2021	2020
Result before taxes	160,720,976	71,654,263
Depreciation and impairment	29,637,006	22,893,076
Impairment/(Reversal) of impairment of investments	5,000,000	32,500,000
Net gains on disposal of non-current assets	-	2,227
Dividends	(153,550,924)	(144,441,360)
Share-based payments	9,440,001	7,116,491
Fair value change in metal derivatives	242,806	(262,027)
Net finance costs	14,550,154	28,045,672
Changes in trade receivables/payables	97,325,164	36,798,461
Changes in other receivables/ payables	26,271,800	(7,010,087)
Change in the provision for employee benefit obligations	(306,491)	46,729
Change in the provisions and other movements	(440,546)	4,605,302
Net income taxes collected/(paid)	800,700	21,387,992
Net cash flow provided from operating activities	189,690,646	73,336,739
Investments in property, plant and equipment	(2,730,578)	(3,543,445)
Disposals of property, plant and equipment	-	-
Investments in intangible assets	(20,831,017)	(21,206,588)
Disposals of intangible assets	-	1,200,000
Investments in financial assets at fair value through profit or loss	(200.000.000)	-
Investments in subsidiaries	(355,000,000)	(110,000,000)
Dividends received	121,500,004	123,000,000
Net cash flow provided from investing activities	(457,061,591)	(10,550,033)
Capital contributions and other changes in equity	-	(132,710)
Dividend distribution	(131,067,383)	(65,815,938)
Sale of treasury shares	1,029,405	921,046
Proceeds of new loans	75,000,000	-
Repayment of loans	(8,333,333)	(116,667,000)
Redemption of bonds	(261,000,000)	-
Proceeds of new bonds	768,750,000	-
Changes in net financial receivables/payables	(58.032.601)	131,449,964
Finance costs paid	(83,576,851)	(57,963,571)
Finance income received	64,449,008	45,609,054
Net cash flow provided from financing activities	367,218,245	(62,599,155)
Total cash flow of the period (A+B+C)	99,847,300	187,551
Net cash and cash equivalents at the beginning of the year	250,108	62,557
Net cash and cash equivalents at the end of the year (D+E)	100,097,408	250,108

Fine Comunicato n.0902-11	Numero di Pagine: 23
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