Prysmian — Interim / Quarterly Report 2017

Jul 27, 2017

H1 2017 Financial Results

Milan – June 27th 2017

Agenda

H1 2017 Highlights

• o Group overview
• o Results by business
• o Outlook
• Financial results
• Appendix

H1 2017 Financial Highlights

Organic Growth improved at -1.5%, (+0.6% in Q2) thanks to better trends in Energy Projects and Industrial; confirmed solid trend in Telecom.

• Strong performance in Telecom.
• Improved profitability in Energy Projects despite negative perimeter effect in China.

Delayed recovery in cyclical business and continued slowdown in SURF (Brazil).

Net Financial Debt at € 1,000m, including approximately € 99m shares Buy-back since January 2017.

H1 2017 Key Financials

Euro Millions, % on Sales

* Org. Growth

Operative Net Working Capital (2) Net Financial Debt

(1) Adjusted excluding restructuring, non-operating income/expenses and non-recurring income/expenses; (2) Defined as NWC excluding derivatives; % on sales is defined as Operative NWC on annualized last quarter sales

Moderate organic decline with improved profitability.

Positive performance in Telecom and Energy Projects offset by weakness in E&I and SURF.

H1 2017 Highlights

• o Group overview
• o Results by business
• o Outlook
• Financial results
• Appendix

Energy Projects

Euro Millions, % on Sales

Sales

* Org. Growth

Highlights

Submarine

• Improving organic trend recovering after a soft start in Q1.
• Adj.EBITDA margin improving also thanks to full utilization of the new installation assets (new vessel Ulisse, new jetting system).
• Solid market outlook, further supported by the reduction of the LRoE (Levelized Revenue of Electricity) in recent offshore wind farm awards in Germany.

Underground High Voltage

• Sales declined organically driven by weak market demand in France, Middle East and the US. Strong performance in APAC supported by a solid order inflow.
• Adj.EBITDA negatively impacted by perimeter change (China) and soft performance in France, Netherlands and US.

Orders Backlog Evolution (€ m)
	Dec '13	Dec '14	Dec '15	Jun '16	Dec '16	Jun'17*
Underground HV	~450	~450	~600	~500	~350	~400
Submarine	~2,050	~2,350	~2,600	~2,450	~2,050	~2,050
Group	~2,500	~2,800	~3,200	~2,950	~2,400	~2,450
* Excludes RTE offshore wind export cable worth approx. € 300m

Energy & Infrastructure

Euro Millions, % on Sales

* Org. Growth 3.016 1.567 1.658 2016 H1'16 H1'17 -3.3%*

Adj. EBITDA / % of Sales

Power Distribution

• Market slowdown in Germany and Eastern Europe progressing in line with expectations. Positive performance in APAC, the Nordics and North America.

Highlights

• Adj.EBITDA margin declined slightly due the tough market conditions in Central and Easter Europe and in Oman.

Quarterly Adj.EBITDA evolution

H1 2017 Financial Results 8

Industrial & Network Components

Euro Millions, % on Sales

* Org. Growth

Adj. EBITDA / % of Sales

Sales Highlights

Specialties, OEMs & Renewables

• Low single digit organic growth thanks to a solid performance in Railway and Infrastructure, ongoing recovery in Mining and Renewables. Crane, Defense and Marine slowing down after the peak of 2016.
• Solid trend in APAC and North America. Europe improving after a soft start of the year.
• Increasing order backlog creates a sustainable trend for the remaining part of the year.

Elevator

• Slight organic decrease due to projects delays in China. Positive volumes trend in Europe.
• Adj.EBITDA was negatively affected by the volume drop in China and the unfavourable product mix in North America.

Automotive

• Double digit organic increase with strong performance in APAC and North America. Europe broadly stable.
• Profitability improvement driven by volume growth in North America and APAC and by a leaner manufacturing set-up in Europe.

Network Components

• Soft volumes and margin driven by the slowdown of HV accessories in Europe and China. Positive performance in MV and LV business in Europe and US.

Oil & Gas Euro Millions, % on Sales

Sales

* Org. Growth

Adj. EBITDA / % of Sales

Highlights

• Umbilical: weak performance driven by 2016 low projects awards in Brazil. Market environment remains highly competitive.
• DHT: Volume recovery in onshore segment (US Shale) partially offset by weak demand from international markets. Profitability negatively affected by unfavorable product mix (on shore vs. offshore).

Core Cable Oil & Gas

SURF

• Sales improved organically thanks to onshore projects in Middle East, Russia and North America. Offshore remains at very low level.
• Volume recovery and efficiency sustaining profitability while price remain challenging due to overcapacity.

Telecom Euro Millions, % on Sales

Sales

* Org. Growth

Adj. EBITDA / % of Sales

* Adj. EBITDA margin excl. €8mln bad debt provision in Brazil

Highlights

Telecom Solutions

• Double-digit organic growth in optical cables segment confirmed in Q2.
• Solid market demand in Europe and US driven by FTTH/FTTC roll-out acceleration.
• Declining performance in the copper business due to the challenging comparison with H1 2016.
• €250m ongoing investment 3 year plan aimed at improving production capacity and efficiency worldwide.

MMS

• Growing volumes and margin in Europe and APAC, also supported by the new manufacturing set-up in Europe.
• Positive market demand benefitting from growing investments in datacentres.

Quarterly LTM Adj. EBITDA and % on LTM Sales evolution

Agenda

H1 2017 Highlights

• o Group overview
• o Results by business
• o Outlook
• Financial results
• Appendix

FY 2017 Outlook

* Including perimeter change in China.

H1 2017 Highlights

• o Group overview
• o Results by business
• o Outlook
• Financial results
• Appendix

Profit and Loss Statement

Euro Millions

	H1 2017	H1 2016
Sales YoY total growth YoY organic growth	3.936 4,0% (1,5%)	3.785 0,0% 0,0%
Adj.EBITDA	362	347
% on sales	9,2%	9,2%
Adjustments	(31)	(25)
EBITDA	331	322
% on sales	8,4%	8,5%
Adj.EBIT	274	261
% on sales	7,0%	6,9%
Adjustments	(31)	(25)
Special items	(36)	(19)
EBIT	207	217
% on sales	5,3%	5,8%
Financial charges	(49)	(37)
EBT	158	180
% on sales	4,0%	4,8%
Taxes	(45)	(56)
% on EBT	(28,5%)	(31,1%)
Net Income	113	124
% on sales	2,9%	3,3%
Minorities	-	9
Group Net Income	113	115
% on sales	2,9%	3,0%

	H1 2017	H1 2016
Non-recurring Items (Antitrust Investigation)	(15)	-
Restructuring	(9)	(11)
Other Non-operating Income / (Expenses)	(7)	(14)
EBITDA adjustments	(31)	(25)
Special items	(36)	(19)
Gain/(loss) on metal derivatives	(11)	2 0
Assets impairment	-	(15)
Other	(25)	(24)
EBIT adjustments	(67)	(44)

	H1 2017	H1 2016
Net interest expenses	(34)	(28)
of which non-cash conv.bond interest exp.	(8)	(4)
Bank fees amortization	(2)	(2)
Gain/(loss) on exchange rates	2	7
Gain/(loss) on derivatives 1 )	(12)	(12)
Non recurring effects	(1)	(1)
Other non-operating financial expenses	(2)	-
Other	-	(1)
Net financial charges	(49)	(37)

1) Includes currency and interest rate derivatives

Statement of financial position (Balance Sheet)

Euro Millions

	30 Jun 2017	30 Jun 2016	31 Dec 2016
Net fixed assets	2.599	2.565	2.630
of which: goodwill	441	444	448
of which: intangible assets	318	347	344
of which: property, plants & equipment	1.625	1.563	1.631
Net working capital	700	646	325
of which: derivatives assets/(liabilities)	9	(16)	7
of which: Operative Net working capital	691	662	318
Provisions & deferred taxes	(357)	(299)	(360)
Net Capital Employed	2.942	2.912	2.595
Employee provisions	371	393	383
Shareholders' equity	1.571	1.488	1.675
of which: attributable to minority interest	199	223	227
Net financial debt	1.000	1.031	537
Total Financing and Equity	2.942	2.912	2.595

Cash Flow Euro Millions

	H1 2017	H1 2016	12 Months (from 1/7/2016 to 30/6/2017)
Adj.EBITDA Adjustments EBITDA	362 (31) 331	347 (25) 322	726 (72) 654
Net Change in provisions & others Share of income from investments in op.activities Cash Flow from operations (bef. WC changes)	4 (19) 316	(14) (14) 294	1 8 (36) 636
Working Capital changes Dividends received Paid Income Taxes Cash flow from operations	(432) 3 (36) (149)	(291) 2 (38) (33)	(74) 1 1 (74) 499
Acquisitions & Disposals Net Operative CAPEX of which acquisitions of assets of ShenHuan Free Cash Flow (unlevered)	- (111) (35) (260)	- (101) - (134)	3 1 (237) (46) 293
Financial charges Free Cash Flow (levered)	(45) (305)	(42) (176)	(71) 222
Free Cash Flow (levered) excl. Acquisitions & Disposals*	(270)	(176)	237
Dividends Treasury shares buy-back & other equity movements Net Cash Flow	(101) (99) (505)	(101) - (277)	(102) (99) 2 1
Net financial debt beginning of the period	(537)	(750)	(1.031)
Net cash flow Equity component of convertible bond Other variations	(505) 4 8 (6)	(277) - (4)	2 1 4 8 (38)
Net financial debt end of the period * Calculated as FCF (levered) excluding "acquisitions of assets of ShenHuan" and "Acquisitions & Disposals".	(1.000)	(1.031)	(1.000)

H1 2017 Highlights

• o Group overview
• o Results by business
• o Outlook
• Financial results

Appendix

Bridge Consolidated Sales

Euro Millions

Profit and Loss Statement

Euro Millions

	H1 2017	H1 2016*
Sales YoY total growth YoY organic growth	3.936 4,0% (1,5%)	3.785 0,0% 0,0%
Adj.EBITDA % on sales of which share of net income Adjustments	362 9,2% 1 9 (31)	347 9,2% 1 4 (25)
EBITDA	331	322
% on sales	8,4%	8,5%
Adj.EBIT	274	261
% on sales	7,0%	6,9%
Adjustments	(31)	(25)
Special items	(36)	(19)
EBIT	207	217
% on sales	5,3%	5,8%
Financial charges	(49)	(37)
EBT	158	180
% on sales	4,0%	4,8%
Taxes	(45)	(56)
% on EBT	(28,5%)	(31,1%)
Net Income	113	124
% on sales	2,9%	3,3%
Minorities	-	9
Group Net Income	113	115
% on sales	2,9%	3,0%

* Restated figures

	H1 2017	H1 2016
Sales to Third Parties	685	761
YoY total growth	(10,0%)	19,3%
YoY organic growth	(5,3%)	22,7%
Adj. EBITDA	116	111
% on sales	17,0%	14,6%
Adj. EBIT	96	94
% on sales	14,0%	12,4%

Energy Products Segment – Profit and Loss Statement

Euro Millions

		H1 2017	H1 2016
	E&I	1.658	1.567
s	YoY total growth	5,8%
e	YoY organic growth	(3,3%)
rti a	Industrial & Netw. Comp.	739	682
P d	YoY total growth	8,5%
r hi	YoY organic growth	2,5%
T	Other	70	49
o	YoY total growth	41,9%
s t e	YoY organic growth	(0,1%)
al S	ENERGY PRODUCTS	2.467	2.298
	YoY total growth	7,4%
	YoY organic growth	(1,5%)
	E&I	74	87
	% on sales	4,5%	5,5%
A D T BI	Industrial & Netw. Comp.	62	64
	% on sales	8,3%	9,4%
E	Other	(1)	-
dj.	% on sales	(1,1%)
A	ENERGY PRODUCTS	135	151
	% on sales	5,5%	6,6%
	E&I	46	56
	% on sales	2,8%	3,5%
T	Industrial & Netw. Comp.	51	54
BI	% on sales	6,9%	8,0%
E dj.	Other	(1)	-
A	% on sales	(1,7%)
	ENERGY PRODUCTS	96	110
	% on sales	3,9%	4,8%

	H1 2017	H1 2016
Sales to Third Parties YoY total growth YoY organic growth	138 (11,7%) (14,8%)	156
Adj. EBITDA	2	7
% on sales	1,1%	4,2%
Adj. EBIT	(7)	(1)
% on sales	(5,1%)	(0,8%)

	H1 2017	H1 2016
Sales to Third Parties	646	570
YoY total growth	13,4%	(1,5%)
YoY organic growth	7,5%	5,8%
Adj. EBITDA	109	78
% on sales	16,8%	13,7%
Adj. EBIT	89	58
% on sales	13,7%	10,3%

Reference Scenario

Commodities & Forex

EUR / USD EUR / GBP EUR / BRL

Based on monthly average data Source: Nasdaq OMX

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 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 Energy Projects, Energy Products 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.