HALF YEAR FINANCIAL REPORT AT 30 JUNE 2019

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Disclaimer

This document contains forward-looking statements, specifically in the sections entitled "Significant events after the reporting period" and "Business outlook", that relate to future events and the 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. Actual results may differ materially from those reflected in forward-looking statements due to multiple factors.

Directors' Report	pag.
Directors and auditors5
Significant events during the period7
Consolidated financial highlights10
Group performance and results 12
Review of Projects operating segment 16
Review of Energy operating segment 19
Review of Telecom operating segment25
Results by geographical area 30
Alternative performance indicators 37
Significant events after the reporting period44
Business outlook45
Foreseeable risks in 201946
Related party transactions 56

Consolidated financial statement and Explanatory Notes Consolidated statement of financial position58	pag.
Consolidated income statement59
Consolidated income statement - 2nd quarter 60
Consolidated statement of comprehensive income 61
Consolidated statement of comprehensive income - 2nd quarter62
Consolidated statement of changes in equity 63
Consolidated statement of cash flows 64
Explanatory notes 65
Scope of consolidation – Appendix A 115
Certification of the half-year condensed consolidated financial statements pursuant to art. 81-ter of consob regulation 11971 dated 14 may 1999 and subsequent amendments and additions 125
Audit report………………………………………………………………………………………127

DIRECTORS' REPORT

PRYSMIAN GROUP | CONTENTS

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DIRECTORS AND AUDITORS

Board of Directors (3)
Chairman	Claudio De Conto (*) (2)
Chief Executive Officer & General Manager	Valerio Battista
Directors	Maria Elena Cappello (**)
	Monica de Virgiliis (**) (2)
	Francesco Gori (**) (1) (4)
	Joyce Victoria Bigio (**) (1)
	Massimo Battaini
	Pier Francesco Facchini
	Maria Letizia Mariani (**) (1)
	Fabio Ignazio Romeo
	Paolo Amato (**) (2)
	Mimi Kung (**)

Board of Statutory Auditors (4)
Chairman	Pellegrino Libroia
Standing Statutory Auditors	Laura Gualtieri
	Paolo Francesco Lazzati
Alternative Statutory Auditors	Michele Milano
	Claudia Mezzabotta

Independent Auditors (5)	EY S.p.A.

(*) Independent director as per Italian Legislative Decree 58/1998

(**) Independent director as per Italian Legislative Decree 58/1998 and Italy's Corporate Governance Code issued by Borsa Italiana S.p.A.

(1) Members of the Control and Risks Committee

(2) Members of the Compensation, Nominations and Sustainability Committee

(3) Appointed by the Shareholders' Meeting on 12 April 2018

(4) Appointed by the Shareholders' Meeting on 5 June 2019

(5) Appointed by the Shareholders' Meeting on 16 April 2015

Introduction

The present Half-Year Financial Report at 30 June 2019 has been drawn up and prepared:

in compliance with art. 154-ter of Italian Legislative Decree 58/1998 and subsequent amendments and with the Issuer Regulations published by Consob (Italy's securities regulator);
in compliance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and endorsed by the European Union, and in accordance with IAS 34 – Interim Financial Reporting, applying the same accounting standards and policies adopted to prepare the consolidated financial statements at 31 December 2018, except as described in the Explanatory Notes in the paragraph entitled "Accounting standards, amendments and interpretations applied from 1 January 2019".

The Half-Year Financial Report has undergone a limited review by the independent auditors.

SIGNIFICANT EVENTS DURING THE PERIOD

Finance activities

Mediobanca loan and partial repayment of the Bridge Loan

On 20 February 2019, the Group entered into an agreement with Mediobanca for a Euro 100 million mediumterm loan for 5 years from the date of signing, with a bullet repayment at maturity. In parallel, a partial repayment of Euro 100 million against the Bridge Loan was instructed on 25 February 2019 and executed on 6 March 2019.

New revolving credit facility agreement

On 3 April 2019, the Group renewed its Euro 1,000 million long-term revolving credit facility with a syndicate of leading Italian and international banks. The five-year credit facility replaces the Syndicated Revolving Credit Facility 2014, which was extinguished at the same time. The funds will be available for business and working capital needs, including the refinancing of existing facilities.

Other significant events

Antitrust Brazil

On 3 January 2019, the Brazilian antitrust authority informed Prysmian Group that the investigations, notified to the Group in 2011, had been completed and gave it ten working days for the submission of briefs, duly filed by the Group on 18 January 2019. The general superintendence of the Brazilian antitrust authority (Administrative Council for Economic Defense – "CADE") published a Technical Note in the Brazilian Federal Official Gazette on 11 February 2019. The Technical Note set out the conclusions of CADE's investigations which favoured the imposition of a fine on the Group. The Technical Note contains the recommendation that the amount the CADE Tribunal could fine the Group be between 15% and 20% of its turnover in Brazil in 2009. In any case, this recommendation is not binding for the CADE Tribunal. The Tribunal's decision, which will be issued at the end of a public hearing, will be provisionally enforceable but can be challenged before the Brazilian courts.

In view of the circumstances described, the Directors, assisted by their legal advisors, have already recognised a provision of Euro 68 million in the financial statements at 31 December 2018.

Claims for damages as a result of the European Commission's 2014 decision

Early in April 2019, some of the Group's companies received claims for damages from a number of customers as a result of the European Commission's April 2014 decision concerning alleged anti-competitive practices. In view of the circumstances described, the Directors, also assisted by their legal advisors, recognised in the financial statements at 31 December 2018 what they considered to be an appropriate level of provisions for risks. Further details can be found in Note 12. Provisions for risks and charges.

Western Link

Some faults in the Western Link interconnector were detected on 19 February 2019 and 6 April 2019, resulting in its temporary switch-off.

In view of these faults and based on assessments by the technical experts, the Board of Directors decided to recognise provisions of Euro 95 million in the financial statements at 31 December 2018. These provisions were against contractual penalties, costs of repair, incidental expenditure, costs of producing an extra length of cable for any future repairs and costs of other repairs that might possibly be necessary in the foreseeable future.

Work to repair the above faults was completed in June 2019.

At the date of approving the current Half-Year Financial Report, the cable is in operation.

Approval of financial statements at 31 December 2018 and dividend distribution

On 5 June 2019, the shareholders of Prysmian S.p.A. approved the financial statements for 2018 and the distribution of a gross dividend of Euro 0.43 per share, for a total of some Euro 113 million. The dividend was paid out from 26 June 2019 to shares outstanding on the record date of 25 June 2019, with the shares going ex-dividend on 24 June 2019.

NEW INDUSTRIAL PROJECTS AND INITIATIVES

Development of power transmission grid in Washington D.C.

On 6 February 2019, the Group signed an agreement to participate in a project to upgrade the US capital district's power transmission system. The multi-stage project is worth approximately USD 190 million and is scheduled to run between 2019 and 2026. The first batch of cables worth USD 13 million is due to be completed by the end of 2019.

Contract to develop a new submarine cable system in Canada (Fundy Isles)

On 11 February 2019, the Group was awarded a contract worth Euro 17 million by New Brunswick Power Corporation (NB Power), the largest electric utility in Canada. The so-called Fundy Isles project involves the development of a new submarine cable link to upgrade the capacity of the existing transmission system in the Passamaquoddy Region of the Bay of Fundy. The new submarine power cable will connect Deer Island, Campobello Island and Grand Manan Island to the Canadian province's mainland power grid. Project completion is scheduled for October 2019.

Contract to develop cable system for the first "floating" offshore wind farm in France

On 19 March 2019, the Group signed a letter of award with PGL (Provence Grand Large), part of EDF Renewables. The project, worth approximately Euro 30 million, involves the development of a turnkey submarine cable system, details of which will be finalised by summer 2019. The project is expected to be commissioned in 2021.

Contract to develop cable system for a "floating" offshore wind farm in the United States

On 16 May 2019, the Group was awarded a contract worth approximately Euro 200 million by Vineyard Wind LLC to develop a submarine power cable system which will deliver renewable energy to the mainland power grid.

The Group will be responsible for the design, manufacture, installation and commissioning of an HVAC (High Voltage Alternating Current) cable system composed of two 220 kV three-core cables with extruded XLPE insulation. The project will require a total of 134 km of cables. The submarine cables will be manufactured at the Group's centres of excellence in Pikkala (Finland) and Arco Felice (Italy). Delivery and commissioning of the project are scheduled for 2021.

Dolwin5 project to connect new wind farms to mainland German grid

On 18 June 2019, the Group was awarded a major contract worth approximately Euro 140 million by the Dutch-German grid operator TenneT for the connection of new offshore wind farms to the mainland German grid. The turnkey system will link the DolWin epsilon offshore converter platform, located approximately 100 km offshore in the German North Sea, to the mainland Emden/Ost converter station, with the purpose of transmitting the renewable energy generated to the German grid.

The submarine and land cables will be manufactured at the Group's centres of excellence in Pikkala (Finland) and Gron (France). Project completion is scheduled for mid-2024.

CONSOLIDATED FINANCIAL HIGHLIGHTS*

(in millions of Euro)
	1st half 2019	1st half 2018 - Combined (**)	1st half 2018 (***)	% change Combined	2018 (***)
Sales	5,849	5,782	4,364	1.2%	10,104
Adjusted EBITDA before share of net profit/(loss) of equity-accounted companies	508	377	303	34.8%	634
Adjusted EBITDA (1)	521	413	339	26.2%	693
EBITDA (2)	492		293		501
Adjusted operating income (3)	366		244		466
Operating income	335		158		215
Profit/(loss) before taxes	263		112		103
Net profit/(loss) for the period	192		80		58

(in millions of Euro)
	30 June 2019	30 June 2018 (***)	Change	31 December 2018 (***)
Net capital employed	5,774	5,356	418	5,059
Employee benefit obligations	528	450	78	463
Equity	2,427	1,892	535	2,374
of which attributable to non-controlling interests	185	185	-	188
Net financial debt	2,819	3,014	(195)	2,222

(in millions of Euro)

	1st half 2019	1st half 2018	% change	2018
Capital expenditures (4)	91	107	-15.0%	285
Employees (at period-end)	29,810	29,940	-0.4%	29,159
Earnings/(loss) per share
- basic	0.72	0.35		0.24
- diluted	0.72	0.35		0.24

(1) Adjusted EBITDA is defined as EBITDA before income and expense for company reorganisation, non-recurring items and other nonoperating income and expense.

(2) EBITDA is defined as earnings/(loss) for the period, before the fair value change in metal derivatives and in other fair value items, amortisation, depreciation, and impairment, finance income and costs, dividends from other companies and taxes.

(3) Adjusted operating income is defined as operating income before income and expense for company reorganisation, non-recurring items and other non-operating income and expense, and before the fair value change in metal derivatives and in other fair value items.
(4) Capital expenditure refers to additions to Property, plant and equipment and Intangible assets, gross of leased assets.

(*) All percentages contained in this report have been calculated with reference to amounts expressed in thousands of Euro.

(**) These figures include General Cable for the period 1 January - 30 June 2018.

(***) The results of General Cable have been consolidated as from 1 June 2018. The previously published comparative figures have been revised after finalising the General Cable purchase price allocation. More details can be found in the Explanatory Notes in Section C. Restatement of comparative figures.

INTRODUCTION

Following the acquisition of General Cable, since June 2018 the Group has embarked on a reorganisation, as a result of which it has redesigned its operating segments and therefore its segment reporting to reflect the new model adopted by the Group.

These changes have caused the operating segments to be redesigned as follows:

Energy: this segment encompasses the former Energy Products segment as well as the Core Oil&Gas and DHT businesses previously included in the OIL&GAS segment no longer significant for the Group;
Projects: this segment encompasses the former Energy Projects segment, the Submarine Telecom business, new to the Group following the acquisition of General Cable, and the Offshore Specialties business (previously known as SURF and included in the OIL&GAS);
Telecom: this segment has not undergone any changes as a result of the above reorganisation.

In keeping with the integration process, initiated last year, as from financial year 2019 the Group's results are being analysed as a whole (with no distinction between the two groups of Prysmian and General Cable). The figures for the first six months of 2019 are compared respectively with those from the Annual Consolidated Financial Statements and, in the case of the key performance indicators (Sales and Adjusted EBITDA), with combined amounts, which incorporate General Cable's results as if consolidated from 1 January 2018. However, it should be stressed that the combined figures are not to be treated as pro-forma ones, even if they have been restated using Prysmian Group's main accounting principles and policies.

GROUP PERFORMANCE AND RESULTS

(in millions of Euro)
	1st half 2019	1st half 2018 - Combined (*)	1st half 2018 (**)	% change Combined	% change Conso	2018 (**)
Sales	5,849	5,782	4,364	1.2%	34.0%	10,104
Adjusted EBITDA before share of net profit/(loss) of equity-accounted companies	508	377	303	34.8%	67.7%	634
% of sales	8.7%	6.5%	6.9%			6.3%
Adjusted EBITDA	521	413	339	26.2%	53.7%	693
% of sales	8.9%	7.1%	7.8%			6.9%
EBITDA	492		293		67.9%	501
% of sales	8.4%		6.7%			5.0%
Fair value change in metal derivatives	-		(25)			(48)
Fair value stock options	(1)		(14)			(6)
Amortisation, depreciation, impairment and impairment reversal	(156)		(96)			(232)
Operating income	335		158		112.0%	215
% of sales	5.7%		3.7%			2.1%
Net finance income/(costs)	(72)		(46)			(112)
Profit/(loss) before taxes	263		112		134.8%	103
% of sales	4.5%		2.6%			1.0%
Taxes	(71)		(32)			(45)
Net profit/(loss) for the period	192		80		140.0%	58
% of sales	3.3%		1.8%			0.6%
Attributable to:						-
Owners of the parent	190		80			58
Non-controlling interests	2		-			-

Reconciliation of Operating Income / EBITDA to Adjusted Operating Income / Adjusted EBITDA

Operating income (A)	335	158	112.0%	215
EBITDA (B)	492	293	67.9%	501
Adjustments:				-
Company reorganisation	7	14		66
of which General Cable integration costs	(1)	5		49
Non-recurring expenses/(income)	6	-		94
of which Antitrust	6	-		94
Other non-operating expenses/(income)	16	32		32
of which General Cable acquisition-related costs	-	4		4
of which General Cable integration costs	2	18		31
of which release of General Cable inventory step-up (1)	-	5		16
of which income from YOFC listing	-	-		(36)
Total adjustments (C)	29	46		192
Fair value change in metal derivatives (D)	-	25		48
Fair value stock options (E)	1	14		6
Assets impairment and impairment reversal (F)	1	1		5
Adjusted operating income (A+C+D+E+F)	366	244	50.0%	466
Adjusted EBITDA (B+C)	521	339	53.7%	693

(*) These figures include General Cable for the period 1 January - 30 June 2018.

(**) The results of General Cable have been consolidated as from 1 June 2018. The previously published comparative figures have been revised after finalising the General Cable purchase price allocation. More details can be found in the Explanatory Notes in Section C. Restatement of comparative figures.

(1) Reflects the higher cost of using finished goods and raw materials measured at General Cable's acquisition-date fair value.

The Group's Adjusted EBITDA for the first six months of 2019 was higher than combined Adjusted EBITDA for the first six months of 2018.

The Projects segment reported negative organic growth in the first half of 2019 due to delays in installation activities, to certain reworks, to a contraction in volumes and prices in the Offshore Specialties business and lower sales volumes in some High Voltage markets, primarily France and North America.

These factors also had an adverse impact on segment profitability which, excluding the effects of the Western Link project recorded in the same period of the previous year, was lower than in the first half of 2018. The Offshore Specialties business was marked by continued contraction in the market for umbilical cables in Brazil.

Energy segment profitability in the first half of 2019 reflected mixed performances within the different business lines. Energy and Infrastructure saw its Trade & Installers business report positive organic sales growth, albeit punctuated by certain geographical differences, and an improvement in profitability, especially in Europe and LATAM. Demand in the Middle East remained weak. The Power Distribution business posted overall growth in Europe and North America and stability in APAC and LATAM, with a global improvement in profitability, despite strong pressure on prices in Europe and a contraction in volumes in the Middle East.

The Overhead Transmission Lines business enjoyed a recovery in LATAM, also expected in the second half of the year.

Industrial & Network Components reported a positive performance by all its business lines in the first half of 2019, except for Automotive and Oil & Gas.

In particular, declining volumes in the Oil & Gas business were partially offset by the positive performance of Downhole Technology and by a slight recovery in the Middle Eastern market. Specialties, OEM and Renewables recorded growth in North America and LATAM, especially in the area of mining and solar applications. The Elevator business enjoyed an upturn in profitability after suffering the previous year from strong pressures in the Chinese market and from the impact of unfavourable exchange rates on its major exposure to the North American market.

The Automotive business's year-on-year performance reflected a reduction in volumes and continued pressures on prices of low-margin products; these impacts were partially mitigated by the strategy of focusing on top-end segments and of improving industrial performance.

The Network Components business was largely stable, with a decline in High Voltage products offset by the robust performance of medium voltage products.

The Telecom segment performed well, especially in Europe and North America, with organic growth in first half 2019 sales reflecting the positive trend already observed last year. Excluding the Copper business's performance, the Telecom segment's organic growth would have been in double digits, also thanks to the robust showing of MMS in North America, and primarily reflecting steady growth in demand for optical fibre and special cables serving major investment projects. The segment's profitability improved despite the negative impact of the associate Yangtze Optical Fibre and Cable Joint Stock Limited Company in China.

In general, the actions to streamline cost structure following the acquisition of General Cable have made a positive contribution to the improvement in profitability.

The Group's sales for the first half of 2019 came to Euro 5,849 million, compared with Euro 5,782 million on a combined basis in the corresponding period of 2018, posting a positive change of Euro 67 million (+1.2%). The main components of this change are as follows:

increase of Euro 108 million (+1.9%) for organic sales growth;
increase of Euro 62 million (+1.1%) due to favourable exchange rate effects;
sales price decrease of Euro 103 million (-1.8%) following metal price fluctuations (copper, aluminium and lead).

The organic growth in sales of +1.9% is analysed between the three operating segments as follows:

Projects	-3.4%;
Energy	+1.8%;
Telecom	+7.9%.

The Group's Adjusted EBITDA (before net expenses for company reorganisation, net non-recurring expenses and other net non-operating expenses totalling Euro 29 million) came to Euro 521 million, posting an increase of Euro 108 million on the corresponding 2018 combined figure of Euro 413 million (+26.2%). This increase includes Euro 21 million for the first-time application of IFRS 16.

EBITDA is stated after Euro 29 million in net expenses for company reorganisation, net non-recurring expenses and other net non-operating expenses (Euro 46 million in the first half of 2018). These adjustments include Euro 1 million in expenses for reorganising and integrating General Cable.

Amortisation, depreciation and impairment amounted to Euro 156 million in the first half of 2019, reporting a year-on-year increase of Euro 60 million, most of which attributable to the consolidation of General Cable, resulting in additional amortisation charges also after completing the purchase price allocation, and to the adoption of IFRS 16.

The fair value change in metal derivatives had a nil effect in the first half of 2019, compared with a negative Euro 25 million in the corresponding period of 2018.

The Group's operating income came to Euro 335 million, compared with Euro 158 million in 2018, therefore posting an increase of Euro 177 million. The significant improvement is mainly attributable to enlargement of the Group's scope of consolidation and exchange rate effects.

Net finance costs amounted to Euro 72 million in the first half of 2019, compared with Euro 46 million in the previous year. The increase is mainly attributable to enlargement of the Group's scope of consolidation, the effects of financial reporting in hyperinflationary economies and to exchange rate trends.

Taxes came to Euro 71 million, representing an effective tax rate of around 27%.

Net profit for the first half of 2019 was Euro 192 million, almost all of which attributable to the Group (Euro 190 million), compared with Euro 80 million in the first half of 2018, all of which attributable to the Group.

The results of the operating segments are analysed in the following pages on a combined basis, therefore incorporating the results of General Cable as from 1 January 2018.

REVIEW OF PROJECTS OPERATING SEGMENT

(in millions of Euro)
	1st half 2019	1st half 2018 - Combined (*)	% change	1st half 2018	2018 (**)
Sales	828	861	-3.9%	747	1,635
Adjusted EBITDA before share of net profit/(loss) of equity-accounted companies	97	69	41.5%	58	89
% of sales	11.7%	7.9%		7.7%	5.4%
Adjusted EBITDA	97	69	41.3%	58	89
% of sales	11.7%	7.9%		7.7%	5.4%
EBITDA	88	67	31.7%	56	(16)
% of sales	10.8%	7.8%		7.4%	-0.9%
Amortisation and depreciation	(31)	(27)		(24)	(54)
Adjusted operating income	66	40	66.1%	34	35
% of sales	8.0%	4.6%		4.5%	2.1%

Reconciliation of EBITDA and Adjusted EBITDA
EBITDA (A)	88	67	31,7%	56	(16)
Adjustments:
Company reorganisation	(2)	1		2	10
of which General Cable integration costs	(3)	-		-	9
Non-recurring expenses/(income):	6	-		-	94
of which Antitrust	6	-		-	94
Other non-operating expenses/(income)	5	-		-	1
of which release of General Cable inventory step-up	-			-	1
Total adjustments (B)	9	1		2	105
Adjusted EBITDA (A+B)	97	68	41,3%	58	89

(*) These figures include General Cable for the period 1 January - 30 June 2018.

(**) The results of General Cable have been consolidated for the period 1 June - 31 December 2018. The previously published comparative figures have been revised after finalising the General Cable purchase price allocation. More details can be found in the Explanatory Notes in Section C. Restatement of comparative figures.

The Projects Operating Segment incorporates the high-tech businesses of High Voltage underground, Submarine Power, Submarine Telecom, and Offshore Specialties, whose focus is projects and their execution, as well as product customisation.

The Group engineers, produces and installs high and extra high voltage cables for electricity transmission both from power stations and within transmission and primary distribution grids. These highly specialised, techdriven products include cables insulated with oil or fluid-impregnated paper for voltages up to 1100 kV and extruded polymer insulated cables for voltages up to 600 kV. These are complemented by laying and postlaying services, grid monitoring and preventive maintenance services, power line repair and maintenance services, as well as emergency services, including intervention in the event of damage.

In addition, Prysmian Group engineers, produces and installs "turnkey" submarine cable systems for power transmission and distribution. The products offered include cables with different types of insulation: cables insulated with layers of oil or fluid-impregnated paper for AC and DC transmission up to 700 kV; cables insulated with extruded polymer for AC transmission up to 400 kV and DC transmission up to 600 kV. The Group uses specific technological solutions for power transmission and distribution in underwater environments, which satisfy the strictest international standards.

With the acquisition of General Cable, Prysmian Group has entered the Submarine Telecom cables business, specialised in the production and installation of data transmission cables.

The Offshore Specialties business incorporates a wide range of products for the oil industry, including umbilical cables, flexible pipes and all electrical, optical and signalling components for oil well management from seabed to offshore platform.

MARKET OVERVIEW

The Submarine Power cables business has faced a weak market in the first half of 2019, in continuation with the end of last year, but has shown signs of recovery with the award of some medium-size projects; several bids are now at an advanced stage of the tendering process, with their award expected in the next few months. This market is expected to grow over the medium term, especially the Offshore Wind segment, fostered by the continuous reduction in electricity generation costs.

The Submarine Telecom cables business has enjoyed a positive performance, with the award of a number of major contracts, manufacturing activities for which are now in progress.

In the High Voltage Underground business, the HVAC market has been largely stable in Europe and mixed in other countries, while the HVDC market, typically for interconnections, has turned down sharply following completion of projects awarded in recent years with no new contracts due to start in the short term since tendering activities are still in progress. North America has recorded an upturn in demand while the first half of the year has seen a slight downturn in Southeast Asia, expected to reverse in the second half. Tendering activities for the major Suedlink and Suedostlink underground HVDC cable projects in Germany got underway at the end of 2018 and are progressing as expected.

The Offshore Specialties business has seen a continuing decline in prices and in volumes.

FINANCIAL PERFORMANCE

Sales to third parties by the Projects operating segment amounted to Euro 828 million in the first half of 2019, compared with the 2018 combined figure of Euro 861 million, posting a negative change of Euro 33 million (- 3.9%).

The main components of this change are as follows:

negative organic sales growth of Euro 29 million (-3.4%);
decrease of Euro 5 million (-0.6%) for exchange rate fluctuations;
small sales price increase of Euro 1 million (+0.1%) for metal price fluctuations.

The negative organic growth of the Projects segment is attributable to delays in installation activities, to certain reworks, to a contraction in volumes and prices in the Offshore Specialties business and lower sales volumes in some High Voltage markets, primarily France and North America.

The Offshore Specialties business was marked by continued contraction in the market for umbilical cables in Brazil. The High Voltage business reported lower sales volumes in some markets, principally France and Spain. All these factors have negatively affected the segment's profitability.

By contrast, the Submarine Telecom business reported growth in volumes and profitability thanks to specific contracts won in recent months both for pure supply and for turnkey projects.

The main Submarine Power projects on which work was performed during the period were: the interconnector between Norway and Britain (North Sea Link), the interconnector between the Netherlands and Denmark (CoBRA cable), the interconnection between France and Great Britain (IFA2), the Hainan2 project in China and the interconnection projects in the Philippines and Bahrain.

Sales in the period were the result of cable manufacturing activities by the Group's industrial facilities (Pikkala in Finland, Arco Felice in Italy, Drammen in Norway and Nordenhan in Germany) and installation services, performed with both its own assets and third-party equipment.

The value of the Group's Submarine Power order book is around Euro 1.3 billion and mainly consists of the following contracts: the interconnector between Norway and Britain (North Sea Link); inter-array and export cables for offshore wind platforms (Deutsche Bucht); the interconnection between France and Great Britain (IFA2); the Hainan2 project in China; the interconnection projects in the Philippines and Bahrain; the offshore projects in France; the Capri-Sorrento interconnection project in Italy; and contracts to supply inter-array cables for the Hornsea2 and Borssele III e IV wind farms; in addition these are the recently acquired cable supply contracts for the Pentland project and Dolwin5 offshore wind project in Germany. The value of the Group's High Voltage order book is around Euro 360 million.

Adjusted EBITDA recorded in the first half of 2019 came to Euro 97 million, up Euro 28 million from Euro 69 million in the same period of 2018; excluding the Euro 70 million in extra costs for the Western Link project recorded in the first half of 2018, Adjusted EBITDA would have been lower than in the corresponding prior year period, mainly due to delays in work on certain projects and to the unfavourable mix of projects currently underway. The results of the High Voltage business were down on the same period last year following completion of a number of high margin HVDC projects during 2018. The Offshore Specialties business confirmed its negative trend in the first six months of 2019.

Adjusted EBITDA benefited in the first half of 2019 from Euro 3 million for the adoption of IFRS 16.

REVIEW OF ENERGY OPERATING SEGMENT

1st half 2019	1st half 2018 (*) - Combined	% change	1st half 2018	2018 (**)
4,135	4,098	0.9%	2,935	6,975
258	187	37.9%	135	316
6.2%	4.6%		4.6%	4.5%
259	189	36.8%	137	320
6.3%	4.6%		4.7%	4.6%
249	113	120.6%	122	249
6.0%	2.7%		4.2%	3.6%
(90)	(62)		(48)	(126)
169	127	33.1%	89	194
4.1%	1.2%		3.0%	2.8%

249	113	120,6%	122	249

7	5		8	45
2	-		4	30
3	8		7	26
-			4	12
10	76		15	71
259	189	36,8%	137	320

(*) These figures include General Cable for the period 1 January - 30 June 2018.

(**) The results of General Cable have been consolidated for the period 1 June - 31 December 2018.

The Energy Operating Segment, incorporating those businesses able to offer a complete and innovative portfolio to a variety of industries, is organised around the business areas of Energy & Infrastructure (comprising Trade & Installers, Power Distribution and Overhead Transmission Lines) and Industrial and Network Components (comprising Oil & Gas, Downhole Technology, Specialties & OEM, Elevators, Automotive and Network Components).

Sales to third parties by the Energy operating segment amounted to Euro 4,135 million in the first half of 2019, compared with the 2018 combined figure of Euro 4,098 million, posting a positive change of Euro 37 million (+0.9%), the main components of which are as follows:

positive organic sales growth of Euro 72 million (+1.8%), mainly concentrated in North America which has benefited from integration of General Cable's activities;
increase of Euro 63 million (+1.5%) linked to positive exchange rate movements;
sales price decrease of Euro 98 million (-2.4%) for metal price fluctuations.

Adjusted EBITDA for the first half of 2019 came to Euro 259 million, up Euro 70 million (+36.8%) from Euro 189 million in the corresponding period of 2018. This increase has been partly generated by cost structure rationalisation following the acquisition of General Cable and by adoption of IFRS 16 (benefiting the first six months of 2019 by Euro 15 million).

The following paragraphs describe market trends and financial performance in each of the Energy operating segment's business areas.

ENERGY & INFRASTRUCTURE

(in millions of Euro)
	1st half 2019	1st half 2018 (*) - Combined	% change	1st half 2018 (**)	2018 () (*)
Sales	2,763	2,680	3.1%	1,823	4,462
Adjusted EBITDA before share of net profit/(loss) of equity accounted companies	158	104	51.7%	70	163
% of sales	5.7%	3.9%		3.9%	3.7%
Adjusted EBITDA	159	106	50.3%	72	166
% of sales	5.8%	3.9%		3.9%	3.7%
Adjusted operating income	98	65	50.8%	41	80
% of sales	3.5%	0.4%		2.2%	1.8%

(*) These figures include General Cable for the period 1 January - 30 June 2018.

(**) The comparative figures reflect a reclassification within the Energy operating segment between the E&I and Industrial & NWC businesses for better allocation of the figures of the Omani subsidiary.

(***) The results of General Cable have been consolidated for the period 1 June - 31 December 2018.

Prysmian produces high and medium voltage cable systems to connect industrial and/or civilian buildings to primary distribution grids and low voltage cables and systems for power distribution and the wiring of buildings. All the products offered comply with international standards regarding insulation, fire resistance, smoke emissions and halogen levels. The low voltage product portfolio includes rigid and flexible cables for distributing power to and within residential and commercial buildings. The Group concentrates product development and innovation activities on high performance cables, such as Fire-Resistant and Low Smoke zero Halogen cables, capable of guaranteeing specific safety standards. The product range has been lately expanded to satisfy the demand for cables serving infrastructure such as airports, ports and railway stations, by customers as diverse as international distributors, buying syndicates, installers and wholesalers.

MARKET OVERVIEW

The reference markets have distinct geographical characteristics (despite international product standards) both in terms of customer and supplier fragmentation and the range of items produced and sold.

During the first half of 2019, the trend in demand experienced by the Trade & Installers business has been stable in North America and in most of the European countries served, except for North Europe and the UK due to the uncertainties surrounding Brexit. APAC, however, has reported a positive trend, in line with market expectations. On the contrary, demand in LATAM has declined.

As for Power Distribution, the major European countries have seen a generally stagnant trend in energy consumption in recent years, in turn adversely affecting demand by the main utilities. The latter, operating in a recessionary economic environment, have either maintained cautious positions given the difficulty of forecasting future growth, or else they have concentrated on business restructuring to improve efficiency and reduce supply-side costs. This situation has exacerbated the competitive dynamics in terms of price and mix, leaving an extremely challenging environment almost everywhere.

In 2019, the Power Distribution business has confirmed the signs of recovery in Europe already seen in the last quarter of 2018, particularly in Germany, the Danube area and North Europe, with demand displaying a slight contraction in South Europe.

Beyond Europe, demand has expanded in North America and APAC; the situation in LATAM, however, remains challenging due to recent changes in the utilities sector currently undergoing consolidation.

The Overhead Transmission Lines business has seen reduced volumes compared with the same period last year, in line with market expectations.

FINANCIAL PERFORMANCE

Sales to third parties by the Energy & Infrastructure business area amounted to Euro 2,763 million in the first half of 2019, compared with the 2018 combined figure of Euro 2,680 million, posting a positive change of Euro 83 million (+3.1%), the main components of which are as follows:

positive organic sales growth of Euro 84 million (+3.1%);
positive change of Euro 41 million (+1.6%) for exchange rate fluctuations;
sales price decrease of Euro 42 million (-1.6%) for metal price fluctuations.

Prysmian Group has carried on its strategy for the Trade & Installers business of focusing on relationships with top international customers and of developing tactical actions to avoid losing sales opportunities, by differentiating its offer in the various markets and by increasing its market share in specific geographical areas. This has led to a complex commercial strategy, not only focused where possible on improving the sales mix, but also aimed at regaining market share while seeking to optimise sales margins.

Energy and Infrastructure saw its Trade & Installers business report positive organic sales growth, albeit punctuated by certain geographical differences, and an improvement in profitability, especially in Europe and LATAM; demand in the Middle East remained weak. The Power Distribution business posted overall growth in Europe and North America and stability in APAC and LATAM, with a global improvement in profitability, despite strong pressure on prices in Europe and a contraction in volumes in the Middle East.

The Overhead Transmission Lines business enjoyed a recovery in LATAM, also expected in the second half of the year.

Given the factors described above, Adjusted EBITDA for the first half of 2019 came to Euro 159 million, compared with Euro 106 million in the corresponding period last year, reflecting an increase of Euro 53 million (+50.3%), part of which due to adoption of IFRS 16 (benefiting the first six months of 2019 by Euro 8 million).

INDUSTRIAL & NETWORK COMPONENTS

(in millions of Euro)
	1st half	1st half	% change	1st half	2018 (**)
	2019	2018 (*) - Combined		2018 (**)	(***)
Sales	1,248	1,264	-1.3%	1,015	2,277
Adjusted EBITDA before share of net profit/(loss) of equity-accounted companies	98	83	18.6%	66	155
% of sales	7.8%	6.5%		6.5%	6.8%
Adjusted EBITDA	98	83	17.8%	66	156
% of sales	7.9%	6.6%		6.5%	6.8%
Adjusted operating income	71	63	12.7%	50	118
% of sales	5.4%	3.4%		4.9%	5.2%

(*) These figures include General Cable for the period 1 January - 30 June 2018.

(***) The results of General Cable have been consolidated for the period 1 June - 31 December 2018.

The extensive range of cables developed specially for certain industries is characterised by the highly specific nature of the solutions offered. In the transport market, Prysmian cables are used in the construction of ships and trains, and in the automotive and aerospace industries; in the infrastructure market, the principal applications for its cables are found in railways, docks and airports. The product range also includes cables for the mining industry, for elevators and for applications in the renewable energy field (solar and wind power), cables for military use and for nuclear power stations, able to withstand the highest radiation environments.

Prysmian also offers a wide range of products for the petrochemicals sector able to serve every onshore and offshore need, including the design and supply of systems for power transmission and data communication from offshore platforms and/or floating hydrocarbon storage vessels to the well-heads; flexible offshore pipes for hydrocarbon transport; Downhole Technology (DHT) solutions, which include steel tubing encased cables to control and power monitoring systems inside extraction wells both offshore and onshore.

The range of products for the petrochemicals industry also includes low and medium voltage power cables, and instrumentation and control cables. The onshore product range is able to support applications in all three segments of the petrochemical production chain: Upstream, Midstream and Downstream.

Lastly, the Group produces accessories and network components, as well as sophisticated control systems; for example, joints and terminations for low, medium, high and extra high voltage cables and submarine systems to connect cables with one another and/or connect them with other network devices, suitable for industrial, construction and infrastructure applications and for use within power transmission and distribution networks.

MARKET OVERVIEW

Trends in Industrial cable markets display considerable inconsistencies within the various business lines and between the different geographical areas. In fact, while some market segments have shown growing demand, like certain OEM sectors (such as Mining, Infrastructure and Solar), others have been stable, like Rolling stock, Wind and Cranes, and others have seen volumes decline in specific countries due to delays in investment projects in areas of national interest, like Railways.

O&G demand shows a slight year-on-year decline in Europe, a minor improvement in North America and regression in APAC mainly due to project phasing. Offshore activities have continued to report a low level of demand, putting pressure not only on the major Asian shipyards (in Singapore and Korea) but also on EPC contractors. The drilling sector has revived, largely driven by the North American market, while the MRO (Maintenance, Repair and Overhaul) segment has remained stable.

The Downhole Technology business is displaying further signs of growth in turnover associated with Shale Oil & Shale Gas production in North America and, in the Middle East, with onshore investments in Saudi Arabia, like for the ESP (Electro Submersible Pump) business, especially in North America and the Middle East.

The Elevator market has recorded growth in North America and APAC, while remaining largely stable in EMEA.

The Automotive market has confirmed the volume contraction in North America and displayed initial signs of slowing in Europe as well, while still remaining stable in LATAM and APAC.

Despite strong growth in the market for electric cars and good performance in the premium market, the latter region has reported a sharp downturn at the mid and low end of the market. The tendency for cable manufacturers to intercept the market upstream has continued.

Volumes on the network components market have been largely in line with the previous year.

FINANCIAL PERFORMANCE

Sales to third parties by the Industrial & Network Components business area amounted to Euro 1,248 million in the first half of 2019, compared with the 2018 combined figure of Euro 1,264 million, recording a negative change of Euro 16 million (-1.3%), the main components of which are as follows:

negative organic sales growth of Euro 13 million (-1.0%);
positive change of Euro 21 million (+1.6%) for exchange rate fluctuations;
sales price decrease of Euro 24 million (-1.9%) for metal price fluctuations.

Industrial & Network Components reported a positive performance by all its business lines in the first half of 2019, except for Automotive and Oil & Gas.

The Network Components business was largely stable, with a decline in High Voltage products offset by the robust performance of medium voltage products.

Given the factors described above, Adjusted EBITDA for the first half of 2019 came to Euro 98 million, up from Euro 83 million in the corresponding period last year, reflecting an increase of Euro 15 million (+17.8%), part of which due to adoption of IFRS 16 (benefiting the first six months of 2019 by Euro 5 million).

OTHER

(in millions of Euro)

	1st half 2019	1st half 2018 (*) - Combined	1st half 2018	2018 (**)
Sales	124	154	97	236
Adjusted EBITDA before share of net profit/(loss) of equity accounted companies	2	-	(1)	(2)
Adjusted EBITDA	2	-	(1)	(2)
Adjusted operating income	-	(1)	(2)	(4)

(*) These figures include General Cable for the period 1 January - 30 June 2018.

(**) The results of General Cable have been consolidated for the period 1 June - 31 December 2018.

This business area encompasses occasional sales by Prysmian Group operating units of intermediate goods, raw materials or other products forming part of the production process. These sales are normally linked to local business situations, do not generate high margins and can vary in size from period to period.

REVIEW OF TELECOM OPERATING SEGMENT

1st half 1st half % change 1st half 2018 (*) 2019 2018 () - 2018 Combined Sales 886 823 7.7% 682 1.494 Adjusted EBITDA before share of net profit/(loss) of equity 153 121 26.1% 110 229 accounted companies % of sales 17.2% 14.8% 16.2% 15.4% Adjusted EBITDA 165 155 6.2% 144 284 % of sales 18.6% 18.9% 21.1% 19.0% EBITDA 162 143 13.3% 139 306 % of sales 18.3% 17.4% 20.3% 20.5% Amortisation and depreciation (34) (26) (23) (47) Adjusted operating income 131 130 1.3% 121 237 % of sales 14.8% 14.3% 17.7% 15.9% Reconciliation of EBITDA and Adjusted EBITDA EBITDA (A) 162 143 13,3% 139 306 Adjustments: Company reorganisation 2 3 3 8 of which General Cable integration costs 1 - - 7 Other non-operating expenses/(income) 1 - 2 (30) of which release of General Cable inventory step-up - 1 3 of which income from YOFC listing - (36) Total adjustments (B) 3 11 5 (22) Adjusted EBITDA (A+B) 165 154 6,2% 144 284	(in millions of Euro)

(*) These figures include General Cable for the period 1 January - 30 June 2018.

(**) The results of General Cable have been consolidated for the period 1 June - 31 December 2018.

As partner to leading telecom operators worldwide, Prysmian Group produces and manufactures a wide range of cable systems and connectivity products used in telecommunication networks. The product portfolio includes optical fibre, optical cables, connectivity components and accessories and copper cables.

Optical fibre

Prysmian Group is one of the leading manufacturers of the core component of every type of optical cable: optical fibre. The Group is in the unique position of being able to use all existing manufacturing processes within its plants: MCVD (Modified Chemical Vapour Deposition), OVD (Outside Vapour Deposition), VAD (Vapour Axial Deposition) and PCVD (Plasma-activated Chemical Vapour Deposition). The result is an optimised product range for different applications. With centres of excellence in Battipaglia (Italy), Eindhoven (the Netherlands) and Douvrin (France), and 5 production sites around the world, Prysmian Group offers a wide range of optical fibres, such as single-mode, multimode and specialty fibres, designed and manufactured to cater to the broadest possible spectrum of customer applications.

Optical cables

Optical fibres are employed in the production of standard optical cables or those specially designed for challenging or inaccessible environments. Optical cables, constructed using just a single fibre or up to as many as 1,728 fibres, can be pulled (or blown) into ducts, buried directly underground or suspended on overhead devices such as telegraph poles or electricity pylons. Cables are also installed in road and rail tunnels, gas and sewerage networks and inside various buildings where they must satisfy specific fire-resistant requirements. Prysmian Group operates in the telecommunications market with a wide range of cable solutions and systems that respond to the demand for wider bandwidth by major network operators and service providers. The product portfolio covers every area of the industry, including long-distance and urban systems, and solutions such as optical ground wire (OPGW), Rapier (easy break-out), Siroccoxs (fibres and cables for blown installation), Flextube® (extremely flexible easy-to-handle cables for indoor or outdoor installations), Airbag (dielectric direct buried cable) and many more.

Connectivity

Whether deployed in outdoor or indoor applications, Prysmian Group's OAsys connectivity solutions are designed for versatility, covering all cable management needs whatever the network type. These include aerial and underground installations, as well as cabling in central offices (or exchanges) or customer premises. Prysmian Group has been designing, developing and making cable and fibre management products for more than two decades and is at the forefront of designing next-generation products specifically for Fibre-To-The-Home (FTTH) networks.

FTTx

Increasing bandwidth requirements, by both business and residential customers, are having a profound effect upon the level of performance required of optical networks, which in turn demands high standards of fibre management. Optimal fibre management in every section of the network is increasingly a matter of priority in order to minimise power loss and overcome the problems caused by ever greater space limitations. The Group has developed the suite of xsNet products for "last mile" access networks, which is also very suited to optical fibre deployment in sparsely populated rural areas. Most of the cables used in FTTx/FTTH systems feature Prysmian's bend-insensitive BendBrightxs optical fibre, which has been specially developed for this application.

FTTA (Fibre-To-The-Antenna)

xsMobile, which offers Fibre-To-The-Antenna (FTTA) solutions, is an extensive passive portfolio which enables mobile operators to upgrade their networks quickly and easily. Incorporating Prysmian's experience in Fibreto-the-Home (FTTH) and its unique fibre innovations, xsMobile provides different product solutions for three applications: antenna towers, roof-top antennas and Distributed Antenna Systems (DAS) for small cell deployment. The technology offers three access types for outdoor and indoor FTTA deployment, as well as backhaul solutions, incorporating the latest fibre technologies.

Copper cables

Prysmian Group also produces a wide range of copper cables for underground and overhead cabling solutions and for both residential and commercial buildings. The product portfolio comprises cables of different capacity, including broadband xDSL cables and those designed for high transmission, low interference and electromagnetic compatibility.

Multimedia Solutions

The Group also produces cable solutions serving communication needs in infrastructure, industry and transport, for a diverse range of applications: cables for television and film studios, cables for rail networks such as underground cables for long-distance telecommunications, light-signalling cables and cables for track switching devices, as well as cables for mobile telecommunications antennae and for data centres.

MARKET OVERVIEW

The global optical fibre cables market was slightly larger in the first six months of 2019 than in the previous year. Demand has remained stable in fast-developing markets, with the Chinese slowdown offset by growth in the APAC market. Optical fibre cable consumption has continued to expand in North America, and in Europe thanks to plans under the Digital Agenda for Europe 2025. The latter envisages the provision of three levels of minimum service depending on the type of user. In fact, government offices and entities like schools and hospitals will benefit from a bandwidth of at least 1 Gb/s. Likewise, the entire residential population will be connected with 100 Mb/s, while all urban areas and transport corridors should have broadband mobile coverage with 5G technology. In Europe, the network architectures used vary as decided by each individual country.

FTTH networks are the preference in France, Spain, Portugal and the Nordics, while G.Fast is the norm in Germany and Britain; although these systems use the last metres of the existing copper network, massive volumes of optical cables are nonetheless required to upgrade the distribution networks. In other places like Italy, the two technologies coexist.

Partly thanks to political stabilisation, South America has seen the major telecom carriers resume investments in both copper and optical fibre cables.

North America has continued to see a big increase in data consumption by all sectors of society. As a result, the major market players are investing in fibre network infrastructure. For instance, Verizon has announced that it is upgrading its network architecture around a next-generation fibre platform with the aim of increasing 4G coverage and laying the foundations for the subsequent development of 5G and IoT (Internet of Things) technology. There has been growing demand for interconnections between data centres.

In conclusion, the growing demand for data on both fixed and mobile networks is leading to a progressive convergence between the two and to a consequent increase in fibre infrastructure investments.

The copper cable market is slowing due to the maturity of the products concerned. The decline in this market has been increasingly evident in the first six months of 2019, with high demand for internet access causing major operators to opt to renew their networks using optical fibre, rather than perform maintenance or upgrade

work on existing networks. It is still worth remaining in this segment since the gradual decommissioning of assets by competitor cable manufacturers nonetheless offers attractive opportunities.

The MMS cable market has reported timid global growth, driven by Asia and, in the case of the optical cables segment, by China. Growth in demand is being fuelled by requests for ever greater bandwidth capacity in professional and office environments and data centres. Interestingly, this trend applies to both new buildings and projects to renovate existing ones. An important contribution to this growth is coming from industrial applications (Industry 4.0) that require new highly specialised products. Another important source of growth is HDTV cables used for the broadcast of digital content such as sports events or other events of media interest.

FINANCIAL PERFORMANCE

Sales to third parties by the Telecom operating segment amounted to Euro 886 million in the first six months of 2019, compared with the combined figure of Euro 823 million in the same period of 2018.

The main components of the change of Euro 63 million (+7.7%) are as follows:

negative change of Euro 6 million (-0.7%) in sales prices for metal price fluctuations;
organic sales growth of Euro 65 million (+7.9%), mainly thanks to further volume growth for optical fibre cables;
positive change of Euro 4 million (+0.5%) for exchange rate fluctuations.

The organic growth in 2019 six-month sales reflects the positive trend already observed last year and was mainly the product of steady growth in demand for optical fibre and special cables serving major investment projects.

Volume trends in Europe have been positive and price levels stable. The Group has won important contracts with leading operators in Europe for the construction of backhaul links and FTTH connections. The network development plan in rural areas is progressing in the Netherlands, while a national plan is being implemented by Swisscom in Switzerland. In France the "Trés Haut Débit" broadband roll-out project is going ahead at full speed. In addition, British Telecom has announced a new FTTH project to connect 3 million "premises" in 8 cities by 2020.

In North America, the development of new ultra-broadband networks is generating a steady increase in domestic demand from which Prysmian is benefiting. In fact, Prysmian has signed a three-year agreement to supply optical fibre cables to Verizon, one of the major US incumbents, as part of its massive multi-year investment program. At the same time, the Group has announced it will increase the production capacity of its North American plants to support this growth. Australia has reported a slowing of demand compared with the same period last year.

Brazil and Argentina have seen increased investments by the major telecom carriers in both copper and optical fibre cables.

Lastly, copper cables have continued their steady decline due to the retirement of traditional networks in favour of next-generation ones.

The high value-added business of optical connectivity accessories has performed well, thanks to the development of new FTTx networks (for last mile broadband access) in Europe, particularly in the Netherlands and Britain.

Growth in the Multimedia Solutions business mainly reflects increased volumes on the North American market, primarily related to the acquisition of General Cable, and on the European market for copper data transmission cables, also observed, albeit to a lesser extent, in South America. This result has been achieved thanks to the business's ability to satisfy growing demand with a high level of responsiveness and service. An approach that, along with its strong customer orientation, has been appreciated as one of the Group's main strengths.

The return on investments in optical fibre cost reduction and the relocation of some cable manufacturing sources to Eastern Europe have also made a substantial contribution to the segment's overall results.

Adjusted EBITDA for the first six months of 2019 came to Euro 165 million, reporting an increase of Euro 10 million (+6.2%) from Euro 155 million in the corresponding period of 2018. The negative results reported by the associate Yangtze Optical Fibre and Cable Joint Stock Limited Company in China and one-off benefit in the first six months of 2018 of reversing the impairment against a receivable owed by a Brazilian customer were more than absorbed by the Group's positive results from organic growth of the optical cables business and adoption of IFRS 16 (producing Euro 3 million in positive effects in the first six months of 2019).

RESULTS BY GEOGRAPHICAL AREA

As stated in the Explanatory Notes to the current Half-Year Financial Report, the Group's operating segments are: Energy, Projects and Telecom, being the same structure used for the periodic reports used to review business performance. Such reporting presents operating performance by macro type of business (Energy, Projects and Telecom), depicting the results of operating segments primarily on the basis of Adjusted EBITDA, defined as earnings (loss) for the period before non-recurring items, the fair value change in metal price derivatives and in other fair value items, amortisation, depreciation and impairment, finance costs and income and taxes.

In order to provide users of the financial statements with information that is more consistent with the Group's greater geographical diversification following the General Cable acquisition, sales and adjusted EBITDA are presented below by geographical area, even though the primary operating segments remain those by business. For this purpose, sales of goods and services are analysed geographically on the basis of the location of the registered office of the company that issues the invoices, regardless of the geographic destination of the products sold. This type of presentation does not produce significantly different results from analysing sales of goods and services by destination of the products sold.

(in millions of Euro)		Sales		Adjusted EBITDA
	1st half 2019	1st half 2018 (*) - Combined	1st half 2019	1st half 2018 (*) - Combined
EMEA**	3,147	3,188	254	195
North America	1,751	1,613	191	117
Latin America	466	500	47	38
Asia Pacific	485	481	29	63
Total	5,849	5,782	521	413

(*) These figures include General Cable for the period 1 January - 30 June 2018. (**) EMEA = Europe, Middle East and Africa.

EMEA

The EMEA geographical area reported organic sales growth of 1.2% in the first half of 2019 compared with the same period last year. Excluding the Projects operating segment, this organic growth would have been +3%, most of which thanks to the Telecom operating segment. Excluding provisions of Euro 70 million recorded in the first half of 2018 for the Western Link project, Adjusted EBITDA was in decline. This decrease was due to the Projects operating segment and was only partially offset by the Telecom operating segment.

North America

North America reported organic sales growth of 4.7% in the first half of 2019 compared with the same period last year. Excluding the Projects segment, this growth would have been 4.1%. The E&I business and the Telecom operating segment particularly accounted for this positive sales performance.

The increase in Adjusted EBITDA was achieved also thanks to synergies from the integration with General Cable.

LATAM

LATAM reported negative organic sales growth of -2.7% in the first half of 2019 compared with the same period last year. Excluding the Projects segment, this growth would have been -1.9%.

The increase in Adjusted EBITDA, reflecting actions to improve product mix, also benefited from acceleration of the program of synergies and cross-selling arising from integration with General Cable, allowing the Group to make the most of new opportunities for growth.

APAC

APAC reported organic sales growth of 1.4% compared with the same period last year. Excluding the Projects segment, this growth would have been 2.0%.

Adjusted EBITDA posted a considerable decline on the same period last year especially in the Telecom operating segment, reflecting the smaller contribution from the associate YOFC and lower sales volumes in Australia.

GROUP STATEMENT OF FINANCIAL POSITION

RECLASSIFIED STATEMENT OF FINANCIAL POSITION

30 June 2019	30 June 2018 (*)	Change	31 December 2018 (*)
5,226	4,983	243	5,101
1,258	1,072	186	692
(710)	(699)	(11)	(734)
5,774	5,356	418	5,059
528	450	78	463
2,427	1,892	535	2,374
185	185	-	188
2,819	3,014	(195)	2,222
5,774	5,356	418	5,059

(*) The previously published comparative figures have been revised after finalising the General Cable purchase price allocation. More details can be found in the Explanatory Notes in Section C. Restatement of comparative figures.

NET FIXED ASSETS

(in millions of Euro)
	30 June 2019	30 June 2018 (*)	Change	31 December 2018 (*)
Property, plant and equipment	2,749	2,554	195	2,629
Intangible assets	2,147	2,162	(15)	2,162
Equity-accounted investments	307	251	56	294
Other investments at fair value through other comprehensive income	13	13	-	13
Assets held for sale (**)	10	3	7	3
Net fixed assets	5,226	4,983	243	5,101

(**) These include the value of Land, Buildings and Other property, plant and equipment classified as Assets held for sale.

At 30 June 2019, net fixed assets amounted to Euro 5,226 million, compared with Euro 5,101 million at 31 December 2018, posting an increase of Euro 125 million mainly due to the combined effect of the following factors:

Euro 89 million in net capital expenditure on property, plant and equipment and intangible assets;
Euro 155 million in depreciation and amortisation charges for the period;
Euro 159 million in increases in property, plant and equipment following adoption of IFRS 16;
Euro 18 million in positive currency translation differences affecting property, plant and equipment and intangible assets;
Euro 13 million for the net increase in equity-accounted investments, mainly comprising Euro 13 million for the share of net profit/(loss) of equity-accounted companies, less Euro 2 million in dividend payments plus Euro 2 million in positive currency translation differences.

NET WORKING CAPITAL

The following table analyses the main components of net working capital:

(in millions of Euro)	30 June 2019	30 June 2018 (*)	Change	31 December 2018 (*)
Inventories	1,666	1,702	(36)	1,511
Trade receivables	1,898	1,843	55	1,635
Trade payables	(2,246)	(2,240)	(6)	(2,132)
Other receivables/(payables)	(49)	(255)	206	(307)
Net operating working capital	1,269	1,050	219	707
Derivatives	(11)	22	(33)	(15)
Net working capital	1,258	1,072	186	692

Net working capital of Euro 1,258 million at 30 June 2019 was Euro 186 million higher than the corresponding figure of Euro 1,072 million at 30 June 2018. Net operating working capital amounted to Euro 1,269 million (10.3% of annualised sales) at 30 June 2019, an increase of Euro 219 million from Euro 1,050 million (8.6% of sales) at 30 June 2018, reflecting the following factors:

an increase in working capital employed in multi-year Submarine projects, reflecting their stage of completion relative to their respective contractual deadlines;
an increase for currency translation differences.

NET FINANCIAL DEBT

The following table provides a detailed breakdown of net financial debt:

(in millions of Euro)	30 June 2019	30 June 2018	Change	31 December
				2018
Long-term financial payables
CDP Loan	100	100	-	100
EIB Loans	126	143	(17)	135
Non-convertible bond	746	744	2	745
Convertible bond 2017	472	462	10	467
Term Loan	994	993	1	993
Bridge Loan	-	698	(698)	500
Unicredit Loan	199	-	199	199
Mediobanca Loan	100	-	100	-
Derivatives	17	-	17	8
Finance leases	111	11	100	11
Other financial payables	12	12	-	11
Total long-term financial payables	2,877	3,163	(286)	3,169

Short-term financial payables
Syndicated Revolving Credit Facility 2014	-	500	(500)	-
EIB Loans	17	17	-	17
Non-convertible bond	4	4	-	14
General Cable convertible bond	-	83	(83)	-
Term Loan	1	1	-	1
Bridge Loan	401	-	401	-
Derivatives	8	12	(4)	8
Finance leases	41	1	40	1
Other financial payables	52	95	(43)	65
Total short-term financial payables	524	713	(189)	106
Total financial liabilities	3,401	3,876	(475)	3,275

Long-term financial receivables	2	12	(10)	2
Long-term bank fees	4	1	3	-
Financial assets at amortised cost	4	5	(1)	5
Short-term derivatives	2	1	1	2
Short-term financial receivables	7	9	(2)	7
Short-term bank fees	2	2	-	1
Financial assets at fair value through profit or loss	20	20	-	25
Financial assets at fair value through other comprehensive income	11	10	1	10
Cash and cash equivalents	530	802	(272)	1,001
Total financial assets	582	862	(280)	1,053
Net financial debt	2,819	3,014	(195)	2,222

Net financial debt of Euro 2,819 million at 30 June 2019 has increased by Euro 597 million from Euro 2,222 million at 31 December 2018. Excluding the effects of applying IFRS 16, net financial debt would have been Euro 2,678 million.

As regards the principal factors behind the change in net financial debt, reference should be made to the next section containing the "Statement of cash flows".

STATEMENT OF CASH FLOWS

(in millions of Euro)	1st half 2019	1st half 2018	Change	12 months (from 1 July 2018 to 30 June 2019)	2018
EBITDA	492	293	199	700	501
Changes in provisions (including employee benefit obligations) and other movements	(88)	28	(116)	31	147
(Gains)/losses on disposal of property, plant and equipment, intangible assets and non-current assets and on dilution of equity interests	(1)	(1)	-	(37)	(37)
Share of net profit/(loss) of equity-accounted companies	(13)	(36)	23	(36)	(59)
Net cash flow provided by operating activities (before changes in net working capital)	390	284	106	658	552
Changes in net working capital	(516)	(333)	(183)	(179)	4
Taxes paid	(44)	(45)	1	(109)	(110)
Dividends from investments in equity-accounted companies	2	4	(2)	14	16
Net cash flow provided/(used) by operating activities	(168)	(90)	(78)	384	462
Cash flow from acquisitions and/or disposals	-	(1,290)	1,290	-	(1,290)
Net cash flow used in operating investing activities	(88)	(103)	15	(263)	(278)
Free cash flow (unlevered)	(256)	(1,483)	1,227	121	(1,106)
Net finance costs	(67)	(39)	(28)	(112)	(84)
Free cash flow (levered)	(323)	(1,522)	1,199	9	(1,190)
Dividend distribution	(118)	(103)	(15)	(120)	(105)
Capital contributions and other changes in equity	(1)	-	(1)	495	496
Net cash flow provided/(used) in the period	(442)	(1,625)	1,183	384	(799)
Opening net financial debt	(2,222)	(436)	(1,786)	(3,014)	(436)
Net cash flow provided/(used) in the period	(442)	(1,625)	1,183	384	(799)
Conversion of Convertible Bond 2013	-	283	(283)	-	283
Net financial debt General Cable	-	(1,215)	1,215	-	(1,215)
Increase due to IFRS 16	(159)	-	(159)	(159)
Other changes	4	(21)	25	(30)	(55)
	(2,819)	(3,014)	195	(2,819)	(2,222)

With reference to the first six months of 2019, net cash flow provided by operating activities (before changes in net working capital) amounted to Euro 390 million.

This cash flow was absorbed by the increase of Euro 516 million in net working capital described earlier. After Euro 44 million in tax payments and Euro 2 million in dividend receipts, net cash flow from operating activities in the first six months of 2019 therefore amounted to a negative Euro 168 million.

Net operating capital expenditure amounted to Euro 88 million in the first six months of 2019, a large part of which relating to projects to increase and rationalise production capacity and to develop new products.

In addition, Euro 67 million in net finance costs were paid and Euro 118 million in dividends were distributed during the first six months of the year.

Net financial debt has been affected, as described above, by net cash outflows for the period of Euro 442 million and by the increase in financial liabilities following adoption of IFRS 16 (Euro 159 million).

With reference to the statement of cash flows for the past twelve months, the principal factors that influenced the change were:

Euro 658 million in net cash flow provided by operating activities before changes in net working capital;
Euro 179 million in cash flow used by the increase in net working capital, Euro 109 million in tax payments and Euro 14 million in dividend receipts, all of which contributing to Euro 384 million in net cash inflow from operating activities;
Euro 263 million in net operating capital expenditure over the past 12 months;
Euro 112 million in payments for net finance costs and Euro 120 million for dividends. Net financial debt has also been affected by the increase of Euro 159 million in financial liabilities following adoption of IFRS 16.

ALTERNATIVE PERFORMANCE INDICATORS

In addition to the standard financial reporting formats and indicators required under IFRS, this document contains a number of reclassified statements and alternative performance indicators. The purpose is to help users better evaluate the Group's economic and financial performance. However, these statements and indicators should not be treated as a substitute for the accepted ones required by IFRS. In this regard, on 3 December 2015, Consob adopted the ESMA guidelines in Italy with publication of "ESMA Guidelines/2015/1415" which supersede the "CESR Recommendation 2005 (CESR/05-178b)". The alternative performance measures have therefore been revised in light of these guidelines.

The alternative indicators used for reviewing the income statement include:

• Adjusted operating income: operating income before income and expense for company reorganisation(1) , before non-recurring items(2), as presented in the consolidated income statement, before other non-operating income and expense(3) and before the fair value change in metal derivatives and in other fair value items. The purpose of this indicator is to present the Group's operating profitability without the effects of events considered to be outside its recurring operations;

• EBITDA: operating income before the fair value change in metal price derivatives and in other fair value items and before amortisation, depreciation and impairment. The purpose of this indicator is to present the Group's operating profitability before the main non-monetary items;

• Adjusted EBITDA: EBITDA as defined above calculated before income and expense for company reorganisation, before non-recurring items, as presented in the consolidated income statement, and before other non-operating income and expense. The purpose of this indicator is to present the Group's operating profitability before the main non-monetary items, without the effects of events considered to be outside the Group's recurring operations;

(3) Other non-operating income and expense: these refer to income and expense that management considers should not be taken into account when measuring business performance.

⁽¹⁾ Income and expense for company reorganisation: these refer to income and expense that arise as a result of the closure of production facilities and/or as a result of projects to enhance the organisational structure's efficiency;

⁽²⁾ Non-recurring income and expense: these refer to income and expense related to unusual events that have not affected the income statement in past periods and that will probably not affect the results in future periods;

• Adjusted EBITDA before share of net profit/(loss) of equity-accounted companies: Adjusted EBITDA as defined above calculated before the share of net profit/(loss) of equity-accounted companies;

• Organic growth: growth in sales calculated net of changes in the scope of consolidation, changes in metal prices and exchange rate effects.

The alternative indicators used for reviewing the reclassified statement of financial position include:

Net fixed assets: sum of the following items contained in the statement of financial position:
- Intangible assets
- Property, plant and equipment
- Equity-accounted investments
- Other investments at fair value through other comprehensive income
- Assets held for sale with regard to Land and Buildings
Net working capital: sum of the following items contained in the statement of financial position:
- Inventories
- Trade receivables
- Trade payables
- Other non-current receivables and payables, net of long-term financial receivables classified in net financial debt
Other current receivables and payables, net of short-term financial receivables classified in net financial debt
Derivatives net of financial instruments for hedging interest rate and currency risks relating to financial transactions, classified in net financial debt
Current tax payables
Assets and Liabilities held for sale with regard to current assets and liabilities
Net operating working capital: sum of the following items contained in the statement of financial position:
- Inventories
- Trade receivables
- Trade payables
- Other non-current receivables and payables, net of long-term financial receivables classified in net financial debt
Other current receivables and payables, net of short-term financial receivables classified in net financial debt
Current tax payables

• Provisions and net deferred taxes: sum of the following items contained in the statement of financial position:

Provisions for risks and charges current portion
Provisions for risks and charges non-current portion
Provisions for deferred tax liabilities
Deferred tax assets

• Net capital employed: sum of Net fixed assets, Net working capital and Provisions.

• Employee benefit obligations and Total equity: these indicators correspond to Employee benefit obligations and Total equity reported in the statement of financial position.

• Net financial debt: sum of the following items:

Borrowings from banks and other lenders non-current portion
Borrowings from banks and other lenders current portion
Derivatives on financial transactions recorded as Non-current derivatives and classified under Long-term financial receivables
Derivatives on financial transactions recorded as Current derivatives and classified under Short-term financial receivables
Derivatives on financial transactions recorded as Non-current derivatives and classified under Long-term financial payables
Derivatives on financial transactions recorded as Current derivatives and classified under Short-term financial payables
Medium/long-term financial receivables recorded in Other non-current receivables
Bank fees on loans recorded in Other non-current receivables
Short-term financial receivables recorded in Other current receivables
Bank fees on loans recorded in Other current receivables
Financial assets at amortised cost
Financial assets at fair value through profit or loss
Financial assets at fair value through other comprehensive income
Cash and cash equivalents

Reconciliation between the Reclassified Statement of Financial Position presented in the Directors' Report and the Statement of Financial Position contained in the Consolidated Financial Statements and Explanatory Notes at 30 June 2019

(in millions of Euro)	30 June 2019 31 December 2018 (*)
		Note	Partial amounts from financial statements	Total amounts from financial statements	Partial amounts from financial statements	Total amounts from financial statements
Net fixed assets
Property, plant and equipment		1		2,749		2,629
Intangible assets		1		2,147		2,162
Equity-accounted investments		2		307		294
Other investments at fair value through other
comprehensive income			,	13		13
Asset held for sale		8	-	10		3
Total net fixed assets	A			5,226		5,101
Net working capital
Inventories	B	4		1,666		1,511
Trade receivables	C	3		1,898		1,635
Trade payables	D	11		(2,246)		(2,132)
Other receivables/payables net	E			(49)		(307)
of which:
Other receivables - non-current			35		31
Tax receivables		3	7		6
Receivables from employees		3	2		2
Advances to suppliers		3	4		4
Other		3	22		19

Other receivables - current Tax receivables		3	904 182		659 158
Receivables from employees and pension
plans		3	6		3
Advances to suppliers		3	20		23
Other		3	95		115
Construction contracts		3	601		360

Other payables - non-current			(14)		(12)
Tax and social security payables		11	(3)		(3)
Other		11	(11)		(9)
Other payables - current			(940)		(953)
Tax and social security payables		11	(195)		(163)
Advances from customers		11	(331)		(332)
Payables to employees		11	(156)		(176)
Accrued expenses		11	(149)		(140)
Other		11	(109)		(142)

Current tax payables			(34)		(32)
Total net operating net working capital	F = B+C+D+E			1,269		707
Derivatives	G		(11)		(15)
of which:
Forward currency contracts on commercial
transactions (cash flow hedges) - non-current		5	(1)		-
Forward currency contracts on commercial
transactions (cash flow hedges) - current		5	(3)		(7)
Forward currency contracts on commercial		5	(1)		(4)
transactions - current
Metal derivatives - non-current		5	(1)		1
Metal derivatives - current		5	(5)		(5)
Total net working capital	H = F+G			1,258		692

(in millions of Euro)
		Note	Partial	30 June 2019 Total	Partial	31 December 2018 (*) Total
			amounts	amounts	amounts	amounts
			from	from	from	from
			financial	financial	financial	financial
			statements	statements	statements	statements
Provisions for risks and charges - non-current		12		(44)		(51)
Provisions for risks and charges - current		12		(630)		(635)
Deferred tax assets				201		190
Deferred tax liabilities				(237)		(238)
Total provisions	I			(710)		(734)
Net capital employed	L = A+H+I			5,774		5,059
Employee benefit obligations	M	13		528		463
Total equity	N	9		2,427		2,374
of which equity attributable to non-controlling				185		188
interests
Net financial debt
Total long-term financial payables	O			2,877		3,169
CDP Loan		10	100		100
EIB Loans		10	126		135
Non-convertible bond		10	746		745
Convertible bond 2017		10	472		467
Term Loan		10	994		993
Bridge Loan		10	-		500
Unicredit Loan		10	199		199
Mediobanca Loan		10	100		-
Derivatives		5	17		8
of which:
Interest rate swaps		5	17		8
Finance leases			111		11
Other payables			12		11
Total short-term financial payables	P			524		106
EIB Loans		10	17		17
Non-convertible bond		10	4		14
Term Loan		10	1		1
Bridge Loan		10	401		-
Derivatives		5	8		8
of which:
Interest rate swaps		5	7		6
Forward currency contracts on financial transactions		5	1		2
Finance leases			41		1
Other payables			52		65
Total financial liabilities	Q = O+P			3,401		3,275
Long-term financial receivables	R	3	(2)		(2)
Long-term bank fees	R	3	(4)		-
Short-term financial receivables	R	3	(7)		(7)
Short-term derivatives	R	5	(2)		(2)
of which:
Forward currency contracts on financial
transactions (current)		5	(2)		(2)
Short-term bank fees	R	3	(2)		(1)
Financial assets at amortised cost	S			(4)		(5)
Financial assets at fair value through other
comprehensive income	T			(11)		(10)
Financial assets at fair value through profit or loss	U	6		(20)		(25)
Cash and cash equivalents	V	7		(530)		(1,001)
	Z =
Total financial assets	R+S+T+U+V			(582)		(1,053)
Total net financial debt	W = Q+Z			2,819		2,222
Total equity and sources of funds	Y = M+N+W			5,774		5,059

(*) The results of General Cable have been consolidated for the period 1 June - 31 December 2018. The previously published comparative figures have been revised after finalising the General Cable purchase price allocation. More details can be found in the Explanatory Notes in Section C. Restatement of comparative figures.

Reconciliation between the principal income statement indicators and the Income Statement contained in the Consolidated Financial Statements and Explanatory Notes at 30 June 2019

accounted companies	O = M-N	508	303
Adjusted EBITDA before share of net profit/(loss) of equity
Share of net profit/(loss) of equity-accounted companies	N	13	36
Adjusted EBITDA	M = E-L	521	339

Total adjustments to EBITDA	L = F+G+H+I	(29)	(46)
Other non-operating expenses	I	(16)	(32)
Other costs and revenues for company reorganisation	H	(2)	(2)
Personnel costs for company reorganisation	G	(5)	(12)
Other non-recurring expenses and revenues	F	(6)	-
EBITDA	E = A+B+C+D	492	293
Fair value stock options	D	1	14
Share of net profit/(loss) of equity-accounted companies	C	13	36
Operating costs	B	(5,371)	(4,121)
Other expenses		(1,017)	(771)
Personnel costs		(745)	(564)
Raw materials, consumables used and goods for resale		(3,730)	(2,903)
Other income		24	47
Change in inventories of work in progress, semi-finished and finished goods		97	70
Sales of goods and services	A	5,849	4,364
		statement	statement
		income	income
		Amounts from	Amounts from
		1st half 2019	1st half 2018
(in millions of Euro)

(in millions of Euro)		1st half 2019	1st half 2018
		Amounts from	Amounts from
		income	income
		statement	statement
Operating income	A	335	158
Other non-recurring expenses and revenues		(6)	-
Personnel costs for company reorganisation		(5)	(12)
Other costs and revenues for company reorganisation		(2)	(2)
Other non-operating expenses		(16)	(32)
Total adjustments to EBITDA	B	(29)	(46)
Fair value change in metal derivatives	C	-	(25)
Fair value stock options	D	(1)	(14)
Non-recurring impairment and impairment reversal	E	(1)	(1)
Adjusted operating income	G=A-B-C-D-E	366	244

Following adoption of the new organisational structure, the alternative performance indicators for 2018 have been restated; the figures also reflect a reclassification within the Energy operating segment between the E&I and Industrial & NWC businesses for better allocation of the figures of the Omani subsidiary.

(in millions of Euro)

						1st half 2018
		Project			Energy	Telecom
		Published		E&I	Industrial & NWC	Other	Total Energy
	Sales	684	747
Energy Projects	Adjusted EBITDA before share of net profit/(loss) of equity-accounted companies	50	58
	Adjusted EBITDA	50	58
	Adjusted operating income	29	34
	Sales	1,681		1,823
E&I	Adjusted EBITDA before share of net profit/(loss) of equity-accounted companies	60		70
	Adjusted EBITDA	61		72
	Adjusted operating income	32		41
	Sales	764			1,015
Industrial & NwC	Adjusted EBITDA before share of net profit/(loss) of equity-accounted companies	58			66
	Adjusted EBITDA	59			66
	Adjusted operating income	48			50
	Sales	76				97
Other	Adjusted EBITDA before share of net profit/(loss) of equity-accounted companies	-				(1)
	Adjusted EBITDA	-				(1)
	Adjusted operating income Sales	- 2,521				(2)	2,935
Products Energy	Adjusted EBITDA before share of net profit/(loss) of equity-accounted	118					135
	companies Adjusted EBITDA	120					137
	Adjusted operating income	80					89
	Sales	134
OIL & GAS	Adjusted EBITDA before share of net profit/(loss) of equity-accounted companies	3
	Adjusted EBITDA	3
	Adjusted operating income	(2)
Telecom	Sales Adjusted EBITDA before share of net profit/(loss) of equity-accounted	645 107						682 110
	companies Adjusted EBITDA	141						144
	Adjusted operating income	119						121
	Sales	216
North America	Adjusted EBITDA before share of net profit/(loss) of equity-accounted companies	14
	Adjusted EBITDA	14
	Adjusted operating income	11
	Sales	109
Europe	Adjusted EBITDA before share of net profit/(loss) of equity-accounted companies	9
	Adjusted EBITDA	9
	Adjusted operating income	8
Latin America	Sales Adjusted EBITDA before share of net profit/(loss) of equity-accounted companies	57 2
	Adjusted EBITDA Adjusted operating income	2 1

SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD

Contract for Viking Link project

On 23 July 2019, the Group received a letter of award from National Grid Viking Link Limited and Energinet for the development of Viking Link, the first submarine cable connection between the United Kingdom and Denmark. Worth close to Euro 700 million, the turnkey contract involves the design, manufacture and installation of the world's longest interconnector, with 1,250 km of cable for the submarine route and approximately 135 km of land cables on the UK side, corresponding to 4 out of the 5 lots awarded. The project is due to be completed by the end of 2023.

Contract for inter-array cables for offshore wind farms in the Netherlands

On 29 July 2019, the Group was awarded a project worth around Euro 30 million by Vattenfall, a leading European energy company, to supply submarine inter-array cable systems for the Hollandse Kust Zuid III and IV offshore wind farms in the Netherlands.

The cables, which will be manufactured at the Prysmian centre of excellence in Nordenham (Germany), are due to be delivered in 2022.

BUSINESS OUTLOOK

The global economy showed positive growth rates in the first six months of 2019, although there were some signs of a slowdown compared with the beginning of the year. The growth rate was higher than expected in the United States, while in the Euro Area growth was held back by several contingent factors (such as the Brexit negotiations and potential political instability in several countries), but also by a decline in expectations among companies and weak demand. The Chinese economy continued to slow.

The expansion of international economic activity is being restrained by various elements of uncertainty and risk: the repercussions of a negative outcome to the current trade talks between the United States and China, the renewed flaring of financial tensions in emerging countries and the circumstances of the conclusion of the process of the departure of the United Kingdom from the European Union.

Within this macroeconomic scenario, Prysmian Group expects that the uptrend seen in North and South America in H1 2019 will continue in the second half of the year. The medium-voltage utilities cable business is expected to confirm the current positive trend generated by renewables development, particularly as regards onshore wind farms, with uneven performances at the level of the various geographical areas. In the submarine systems and cables business, Prysmian Group aims to consolidate its leadership in a market that is expected to increase slightly compared to 2018. This business's performance will be positively influenced by the recovery of the negative effect of the Western Link provisions (Euro 165 million). An organic decrease is forecast in 2019 due to the additional work required on several orders already begun in late 2018 and the weak order intake in 2018. In the High Voltage Underground systems and cables business, the Group expects virtually stable results. For the Telecom segment, the Group expects that growth will remain essentially solid in 2019, driven by the increase in demand for optical cables in Europe and North America, whereas a slowdown is expected due to the current reduction of volumes on the Australian market and the weak trend underway on the Chinese market.

In addition, the translation effect resulting from the conversion of the subsidiaries' results into the reporting currency used in the consolidated accounts is expected to generate a positive impact on the Group's operating performance.

Finally, the synergies resulting from the integration with General Cable continue to prove robust. The goal is to reach cumulative synergies of Euro 175 million by 2021 (of which Euro 120 million by the end of 2019 and Euro 90 million already achieved at the end of June).

In light of the foregoing, the Group expects to achieve an Adjusted EBITDA for 2019 of Euro 950-1,020 million (excluding the impact arising from the application of IFRS 16, expected to amount to about Euro 40 million on a yearly basis), significantly improving compared to Euro 767 million recorded in 2018. The Group also expects to generate cash flows of approximately Euro 300 million ± 10% (FCF before acquisitions & disposals) in 2019. This figure includes the planned outlay of Euro 90 million relating to the restructuring and integration activities. This forecast is based on the Company's current business perimeter.

FORESEEABLE RISKS IN 2019¹

Prysmian Group is exposed in the normal conduct of its business to a number of financial and non-financial risk factors which, if they should occur, could also have a material impact on its results of operations and financial condition. The Group has always acted to maximise value for its shareholders by putting in place all necessary measures to prevent or mitigate the risks inherent in the Group's business, which is why it adopts specific procedures to manage the risk factors that could influence its business results. Given operating performance in the first six months of the year and the specific macroeconomic context, the principal risk factors currently foreseeable for the second half of 2019 are described below according to their nature.

STRATEGIC RISKS

Risks associated with the competitive environment

Many of the products offered by Prysmian Group, primarily in the Trade & Installers and Power Distribution businesses, are made in conformity with specific industrial standards and so are interchangeable with those offered by major competitors. Price is therefore a key factor in customer choice of supplier. The entry into mature markets (e.g. Europe) of non-traditional competitors, meaning small to medium manufacturing companies with low production costs, and the need to saturate production capacity, together with the possible occurrence of a contraction in market demand, translate into strong competitive pressure on prices, with possible consequences for the Group's expected margins.

In addition, high value-added segments - like High Voltage underground cables, Optical Cables and Submarine cables - are seeing an escalation in competition from both existing operators and new market entrants with leaner more flexible organisation models, with potentially negative impacts on both sales volumes and selling prices. With particular reference to the Submarine cables business, the high barriers to entry, linked to difficultto-replicate ownership of technology, know-how and track record, are driving large market players to compete not so much on the product as on the related services.

The strategy of rationalising production facilities currently in progress, the consequent optimisation of cost structure, the policy of geographical diversification and, last but not least, the ongoing pursuit of innovative technological solutions, all help the Group to address the potential effects arising from the competitive environment.

Risks associated with changes in the macroeconomic environment and in demand

Factors such as trends in GDP and interest rates, the ease of getting credit, the cost of raw materials, and the general level of energy consumption, significantly affect the energy demand of countries which, in the face of persistent economic difficulties, then reduce investments that would otherwise develop the market. Government incentives for alternative energy sources and for developing telecom networks also face reduction for the same reason. Prysmian Group's transmission business (high voltage submarine cables) and Power

¹ The risks described in this section are those that, at the date of the present document, the Group believes, if they were to occur, could have a material adverse near-term impact on its business, financial condition, earnings and future prospects.

Distribution and Telecom businesses, all highly concentrated in the European market, are being affected by shifting contractions of demand in this market caused by the region's prolonged economic downturn.

To counter this risk, the Group is pursuing, on the one hand, a policy of geographical diversification in non-European countries (e.g. Vietnam, Philippines, etc.) and, on the other, a strategy to reduce costs by rationalising its production structure globally in order to mitigate possible negative effects on the Group's performance in terms of lower sales and shrinking margins.

In addition, the Group constantly monitors developments in the global geopolitical environment which, as a result - for example - of the introduction of specific industrial policies by individual countries, could require it to revise existing business strategies and/or adopt mechanisms to safeguard the Group's competitive position.

Risks associated with dependence on key customers

In the Offshore Specialties business, Prysmian Group has a significant business relationship with Petrobras, a Brazilian oil company, for the supply of umbilical cables, developed and manufactured at the factory in Vila Velha, Brazil. In light of the country's continuing economic difficulties causing the local market for umbilical cables to contract and of growing competitive pressures on product technological innovation, the sustainability, even partial, of the business in Brazil could be impacted.

While committed to maintaining and strengthening its business relationship with this customer over time, the Group has started to gradually reorganise the business unit to make its processes more efficient and to concentrate increasingly on developing new products whose technical and economic solutions can lower production costs.

Risk of instability in the Group's countries of operation

Prysmian Group operates and has production facilities and/or companies in Asia, Latin America, the Middle East and Eastern Europe. The Group's operations in these countries are exposed to different risks linked to local regulatory and legal systems, the imposition of tariffs or taxes, exchange rate volatility, and political and economic instability affecting the ability of business and financial partners to meet their obligations.

Significant changes in the macroeconomic, political, tax or legislative environment of such countries could have an adverse impact on the Group's business, results of operations and financial condition; consequently, as already mentioned in an earlier paragraph, the Group constantly monitors developments in the global geopolitical environment which could require it to revise existing business strategies and/or adopt mechanisms to safeguard its competitive position.

FINANCIAL RISKS

Prysmian Group's risk management strategy focuses on the unpredictability of markets and aims to minimise the potentially negative impact on the Group's financial performance. Some types of risk are mitigated by using financial instruments (including derivatives).

Financial risk management is centralised with the Group Finance department which identifies, assesses and hedges financial risks in close cooperation with the Group's operating companies.

The Group Finance, Administration and Control department provides guidelines on risk management, with particular attention to exchange rate risk, interest rate risk, credit risk, the use of derivative and non-derivative instruments, and on how to invest excess liquidity. Such financial instruments are used solely to hedge risks and not for speculative purposes.

Risks associated with availability of financial resources and their cost

The volatility of the international banking and financial system could be a potential risk factor in terms of raising finance and its associated cost. In addition, non-compliance with the financial and non-financial covenants contained in the Group's credit agreements could restrict its ability to increase its net indebtedness, other conditions remaining equal. In fact, should it fail to satisfy one of these covenants, this would trigger a default event which, unless resolved under the terms of the respective agreements, could lead to their termination and/or an early repayment of any credit drawn down. In such an eventuality, the Group might be unable to repay the amounts demanded early, in turn giving rise to a liquidity risk.

At present, given the amount of cash and cash equivalents and undrawn committed credit lines, in excess of Euro 1 billion at 30 June 2019, and six-monthly monitoring² of financial covenant compliance (fully satisfied at 30 June 2019), the Group is of the opinion that this risk is significantly mitigated and that it is able to raise sufficient financial resources and at a competitive cost.

Exchange rate volatility

Prysmian Group operates internationally and is therefore exposed to exchange rate risk for the various currencies in which it operates (principally the US Dollar, Canadian Dollar, British Pound). Exchange rate risk occurs when future transactions or assets and liabilities recognised in the statement of financial position are denominated in a currency other than the functional currency of the company which undertakes the transaction. To manage exchange rate risk arising from future trade transactions and from the recognition of foreign currency assets and liabilities, most Prysmian Group companies use forward contracts arranged by Group Treasury, which manages the various positions in each currency.

However, since Prysmian prepares its consolidated financial statements in Euro, fluctuations in the exchange rates used to translate the financial statements of subsidiaries, originally expressed in a foreign currency, could affect the Group's results of operations and financial condition. Exchange rate volatility is monitored both locally and centrally, by the Group Finance department, also using specific indicators designed to intercept potential risk situations which, when thought to exceed the defined tolerance limits, will trigger immediate mitigating actions.

Interest rate volatility

Changes in interest rates affect the market value of Prysmian Group's financial assets and liabilities as well as its net finance costs. The interest rate risk to which the Group is exposed is mainly on long-term financial liabilities, carrying both fixed and variable rates. Fixed rate debt exposes the Group to a fair value risk. The Group does not operate any particular hedging policies in relation to the risk arising from such contracts since it considers this risk to be immaterial. Variable rate debt exposes the Group to a rate volatility risk (cash flow risk). The Group can use interest rate swaps (IRS) to hedge this risk, which transform variable rates into fixed ones, thus reducing the rate volatility risk. IRS contracts make it possible to exchange on specified dates the

² The financial covenants are measured at the half-year close on 30 June and at the full-year close on 31 December.

difference between contracted fixed rates and the variable rate calculated with reference to the loan's notional value. A potential rise in interest rates, from the record lows reached in recent years, could represent a risk factor in coming quarters.

Credit risk

Credit risk is represented by Prysmian Group's exposure to potential losses arising from the failure of business or financial partners to discharge their obligations. This risk is monitored centrally by the Group Finance department, while customer-related credit risk is managed operationally by the individual subsidiaries. The Group does not have any excessive concentrations of credit risk, but given the economic and social difficulties faced by some countries in which it operates, the exposure could undergo a deterioration that would require closer monitoring. Accordingly, the Group has procedures in place to ensure that its business partners are of recognised reliability and that its financial partners have high credit ratings. In addition, in mitigation of credit risk, the Group has a global trade credit insurance program covering almost all its operating companies; this is managed centrally by the Risk Management department, which monitors, with the assistance of the Group's Credit Management function, the level of exposure to risk and intervenes when tolerance limits are exceeded due to difficulty in finding coverage on the market.

Liquidity risk

Liquidity risk indicates the sufficiency of an entity's financial resources to meet its obligations to business or financial partners on the agreed due dates.

With regard to Prysmian Group's working capital cash requirements, these increase significantly during the first half of the year when it commences production in anticipation of order intake, with a consequent temporary increase in net financial debt.

Prudent management of liquidity risk involves the maintenance of adequate levels of cash, cash equivalents and short-term securities, the maintenance of an adequate amount of committed credit lines, and timely renegotiation of loans before their maturity. Due to the dynamic nature of the business in which Prysmian Group operates, the Group Finance department favours flexible arrangements for sourcing funds in the form of committed credit lines.

As at 30 June 2019, the Group's total financial resources, comprising cash and cash equivalents and undrawn committed credit lines, came to in excess of Euro 1 billion.

Risks associated with commodity price volatility

The main commodities purchased by Prysmian Group are copper and aluminium, accounting for more than 50% of the total raw materials used to manufacture its products. The Group neutralises the impact of possible rises in the price of copper and its other principal raw materials through hedging activities and automatic sales price adjustment mechanisms. Hedging activities are based on sales contracts or sales forecasts, which if not met, could expose the Group to commodity price volatility risk.

A dedicated team within the Group Purchasing department monitors and coordinates centrally those sales transactions requiring the purchase of raw materials and the related hedging activities carried out by each subsidiary, ensuring that the level of exposure to risk is kept within defined tolerance limits.

OPERATIONAL RISKS

Liability for product quality/defects

Any defects in the design and manufacture of Prysmian Group's products could give rise to civil or criminal liability in relation to customers or third parties. Therefore, the Group, like other companies in the industry, is exposed to the risk of legal action for product liability in the countries where it operates. In line with the practice followed by many industry operators, the Group has taken out insurance which it considers provides adequate protection against the risks arising from such liability. Should such insurance coverage prove insufficient, the Group's results of operations and financial condition could be adversely affected.

In addition, the Group's involvement in this kind of legal action and any resulting liability could expose it to reputational damage, with potential additional adverse consequences for its results of operations and financial condition.

Risks associated with non-compliance with the contractual terms of turnkey projects

Projects for high/medium voltage submarine or underground connections are characterised by contractual forms entailing a "turnkey" type of project management that therefore demands compliance with deadlines and quality standards, guaranteed by penalties calculated as an agreed percentage of the contract value and that can even result in contract termination.

The application of such penalties, the obligation to compensate any damages as well as indirect effects on the supply chain in the event of late delivery or production problems, could significantly affect project performance and hence the Group's margins. Possible damage to market reputation cannot be ruled out.

Given the complexity of "turnkey" projects, Prysmian has implemented a quality management process involving extensive testing of cables and accessories before delivery and installation, as well as specific ad hoc insurance coverage, often through insurance syndicates, able to mitigate exposure to risks from production through to delivery.

Moreover, the ERM assessments for this particular risk have led the Risk Management department, with the support of the Commercial area, to implement a systematic process of Project Risk Assessment for "turnkey" projects, involving the assignment of a Project Risk Manager, right from the bidding stage, with the aim of identifying, assessing and monitoring over time the Group's exposure to specific risks and of taking the necessary mitigation actions. The decision to present a bid proposal to the customer therefore also depends on the results of risk assessment.

With regard to the events involving Western Link, an electrical transmission cable between Scotland, Wales and England, please refer to the section on Significant Events in the Period.

Risk of business interruption through dependence on key assets

The submarine cables business is heavily dependent on certain key assets, such as the Arco Felice plant in Italy for the production of a particular type of cable and one of its cable-laying vessels (the "Giulio Verne"), some of whose technical capabilities are hard to find on the market. The loss of one of these assets due to unforeseen natural disasters (e.g. earthquakes, storms, etc.) or other accidents (e.g. fire, terrorist attacks, etc.) and the consequent prolonged business interruption could have a critical economic impact on the Group's performance.

The construction of a new cable-laying vessel began in 2018, with a best-in-class specification. As a result, the risk of dependence on the "Giulio Verne" has been reduced.

Prysmian addresses this risk through:

a systematic Loss Prevention program, managed centrally by the Risk Management department, which, through periodic on-site inspections, allows the adequacy of existing systems of protection to be assessed and any necessary remedial actions decided to mitigate the estimated residual risk. As reported at 31 December 2018, the Group's operating plants are sufficiently protected and there are no significant exposures to risk. All the plants have been classified as "Excellent Highly Protected Rated (HPR)", "Good HPR" or "Good not HPR", in accordance with the methodology defined by internationally recognised best practices in the field of Risk Engineering & Loss Prevention;
specific disaster recovery & business continuity plans which allow appropriate countermeasures to be activated as soon as possible in order to minimise the impact of a catastrophic event and to manage any consequent crisis;
specific insurance programs for coverage against any damage to assets and loss of associated contribution margin due to business interruption, such as to minimise the financial impact of this risk on cash flow.

Environmental risks

The Group's production activities in Italy and abroad are subject to specific environmental regulations, amongst which those concerning soil and subsoil and the presence/use of hazardous materials and substances, including for human health. Such regulations are enforcing increasingly strict standards on companies, which are therefore obliged to incur significant compliance costs.

Considering the Group's large number of plants, the probability of an accident, with consequences not only for the environment but also for the continuity of production, cannot be ignored or the accompanying potentially significant economic and reputational impact. Accordingly, Prysmian adopts a series of controls that keep the risk at an acceptable level. In fact, environmental issues are managed centrally by the HQ Health Safety & Environment (HSE) department which oversees local HSE departments and is responsible for organising specific training activities, for adopting systems to ensure strict adherence to regulations in accordance with best practices, as well as for monitoring risk exposures using specific indicators and internal and external auditing activities.

With reference to just the production sites within the pre-acquisition Prysmian Group, the certified percentage has remained relatively stable, with 95% certified under ISO 14001 and 78% certified under OHSAS 18001; in addition, specific other Organisations have also been certified (R&D, installation activities, kitting and distribution centres, etc.), for a total of four OHSAS 18001 certificates and two ISO 14001 certificates.

The overall situation has been changed by the acquisition of General Cable, about a third of whose plants (not counted in the above percentages) are currently certified under the standards in question (ISO 14001 and OHSAS 18001).

Therefore, following the acquisition, the program of certifications at Group level has been duly revised, with the intent of certifying all the production units (except for specific cases) in the future.

Cyber security risks

The growing spread of web-based technologies and business models allowing the transfer and sharing of sensitive information through virtual spaces (i.e. social media, cloud computing, etc.) carries computing vulnerability risks which Prysmian Group cannot ignore in the conduct of its business. Exposure to potential cyberattacks could be due to several factors such as the necessary distribution of IT systems around the world, and the possession of high value-added information such as patents, technological innovation projects, as well as financial projections and strategic plans not yet disclosed to the market, unauthorised access to which could damage a company's results, financial situation and image. In partnership with the Risk Management department, the Group's IT Security function periodically performs specific assessments to identify any vulnerabilities in IT systems locally and centrally that could compromise business continuity.

Furthermore, since 2016 Prysmian Group has started to implement a structured and integrated process for managing cyber security-related risks which, under the leadership of the Group IT Security function, in partnership with the Risk Management department, aims to strengthen the Group's IT systems and platforms and introduce robust mechanisms to prevent and control any cyberattacks. A cogent Information Security strategy has been defined in this regard that clarifies the governance structure adopted by the Group and the guidelines for managing cyber risk in connection with IT architectures and business processes. A special Information Security Committee, consisting of the key figures involved in managing cyber risk³ , has been appointed with the mission of defining the strategic and operational Cyber Security objectives, of coordinating the main initiatives undertaken, and of examining and approving policies, operating procedures and instructions. The Committee is convened on a periodic basis (twice a year) and in any case upon the occurrence of any extraordinary events or crises. Lastly, specific e-learning training sessions have been provided to all the Group's IT staff with the aim of raising their awareness of this issue.

LEGAL AND COMPLIANCE RISKS

Compliance risks associated with Code of Ethics, Policies and Procedures

Compliance risk generically represents the possibility of incurring legal or administrative sanctions, material financial losses or reputational damage as a result of violations of prevailing laws and regulations. Prysmian Group deploys a series of organisational procedures designed to define the principles of legality, transparency, fairness and honesty through which to operate. In particular, since its inception, the Group has adopted a Code of Ethics, a document which contains the ethical standards and the behavioural guidelines that all those engaged in activities on behalf of Prysmian or its subsidiaries (including managers, officers, employees, agents, representatives, contractors, suppliers and consultants) are required to observe. The Group undertakes, through its Internal Audit & Compliance department, to constantly monitor compliance and actual application of these rules, with no type of violation tolerated.

However, despite this ongoing endeavour, assiduous vigilance and periodic information campaigns, it is not possible to rule out future episodes of improper conduct in breach of policy, procedures or the Code of Ethics, and hence of current legislation and regulations, by those engaged in performing activities on Prysmian's behalf, which could result in legal sanctions, fines or reputational damage, even on a material scale.

³ The following sit, as permanent members, on the Information Security Committee: the Chief Operating Officer, the Vicepresident HR&Organization, the Chief Security Officer, the Chief Information Officer, the Chief Risk Officer, the Chief Audit & Compliance Officer and the Group's IT Security Manager.

Risks of non-compliance with Data Protection (Privacy) legislation

In the current context, featuring a continuous globalisation of business, a proliferation of channels, information access and an increase in volume and types of data managed, Prysmian has the chance to create new opportunities and new services; at the same time, however, it is experiencing a time of great complexity concerning the governance of data and its compliance with international regulations, as well as the growth of potential threats to the confidentiality, integrity and availability of information.

It is therefore essential to address the issue of how to manage information and data considered confidential or sensitive, not solely as a compliance problem but also as a security problem and a business priority.

Furthermore, the coming into force, in May 2018, of the new European Regulation (EU) 2016/679 (GDPR – General Data Protection Regulation) is one of the driving forces behind a renewed commitment to data protection, particularly personal data.

The personal data protection program adopted by Prysmian is based on three fundamental elements impacting the entire corporate structure:

Development of a "data-centric" model by mapping the relevant personal data processed by the company functions and establishing a data processing register;
Definition of a new updated governance model, designed to meet the requirements of the GDPR and based on the following pillars:
- A new organisational structure that includes the appointment of a Data Protection Officer, serving in an advisory and monitoring capacity, with the appropriate duties and responsibilities delegated to Internal Data Supervisors, who are responsible for the more substantial processing of data and supervise the activities of persons who process the data;
- A series of new policies and standard appointment documents.
Implementation of adequate technical, organisational measures to guarantee a level of security appropriate to the risk.

The program also includes communication and training materials to raise user awareness of the GDPR and of the measures adopted by Prysmian to ensure compliance with this Regulation.

Following the acquisition of General Cable, the personal data protection program has been updated and extended to General Cable.

In fact, during the course of 2018, General Cable implemented the new European rules of the GDPR throughout its group and also carried out training for about 800 employees.

Risks of non-compliance with anti-bribery legislation

In recent years, legislators and regulators have devoted much attention to the fight against bribery and corruption, with a growing tendency to extend responsibility to legal entities as well as to natural persons. With growing internationalisation, organisations more and more often find themselves operating in contexts exposed to the risk of bribery and having to comply with the many related regulations, such as Italian Legislative Decree 231/2001, Italy's Anti-bribery Law (Law 190/2012), the Foreign Corrupt Practices Act, the UK Bribery Act etc., all with a common objective: to counteract and repress corruption.

The Group's business model, with a global presence in over 50 countries and a wide array of applications for its products, brings it into constant contact with multiple third parties (suppliers, intermediaries, agents and customers). In particular, the management of large international projects involves having commercial relations even in countries with a potential risk of bribery (as per the Corruption Perception Index⁴ ), often through local commercial agents and public officials.

Prysmian Group has therefore implemented a series of actions designed to manage bribery and corruption on a preventive basis; foremost amongst these is the adoption of an Anti-Bribery Policy which prohibits the bribery of both public officials and private individuals and requires employees to abide by it and to observe and comply with all anti-bribery legislation in the countries in which they are employed or active, if this is more restrictive. In addition, specific e-learning activities (training and testing) for all Group personnel are periodically conducted to raise awareness about compliance with this legislation.

In continuity with the previous year, Prysmian Group moved forward in 2018 with the activities defined in its Anti-Bribery Compliance Program, inspired by the ISO 37001 guidelines for Anti-bribery management systems, published on 15 October 2016 and intended to strengthen its monitoring of and focus on compliance issues. This program, in addition to giving greater control over management of the bribery risk, also aims to minimise the risk of punishment if crimes related to corruption are committed by employees or third parties. The core of the ISO 37001 standard is the control of third parties (suppliers, intermediaries, agents and customers) through a due diligence system designed to reveal any critical or negative events that undermine the reputation of third parties with whom Prysmian Group deals. Following the acquisition of General Cable, Prysmian Group's Anti-Bribery Compliance Program has been updated and expanded to include the additional activities in this area envisaged by the General Cable Compliance Program.

Further details about the actions taken by the Group to prevent corrupt practices can be found in the specific section of the 2018 Sustainability Report.

Risks of non-compliance with antitrust law

Competition rules, covering restrictive agreements and abuse of dominant position, now play a central role in governing business activities in all sectors of economic life. Its extensive international presence in more than 50 countries means the Group is subject to antitrust law in Europe and every other country in the world in which it operates, each with more or less strict rules on the civil, administrative and criminal liability of parties that violate the applicable legislation. In the last decade, local Antitrust Authorities have paid increasing attention to commercial activities by market players, also involving a tendency for international collaboration between authorities themselves. Prysmian aspires to operate on the market in compliance with the competition rules.

In keeping with the priorities identified by the ERM process, the Board of Directors has adopted an Antitrust Code of Conduct that all Group employees, Directors and managers are required to know and observe in the conduct of their duties and in their dealings with third parties. The Antitrust Code of Conduct was updated during 2018; the new version, published on the company intranet and made available to all the Group's employees, contains the general principles of antitrust law generally found in industry regulations applying in the various jurisdictions in which the Group operates. In addition, other more detailed documents are currently

⁴ The Corruption Perception Index (CPI) is an indicator published annually by Transparency International, used to measure the perception of public sector corruption in various countries around the world.

being prepared, each focusing on the antitrust legislation specifically applicable in the main countries in which the Group operates. The Antitrust Code of Conduct forms an integral part of the training program and is intended to provide a framework for the issues concerning application of EU and Italian competition law on collusive practices and abuse of dominant position, within which specific situations are assessed on a caseby-case basis. These activities represent a further step in establishing an "antitrust culture" within the Group by promoting knowledge and heightening individual accountability for professional duties arising under antitrust legislation. In this context, specific classroom training sessions were held in 2017 and 2018 mostly for the Group's sales force and organised in collaboration with external lecturers and legal consultants. In addition, Elearning modules were launched on the company intranet during 2018 with the aim of continuously supporting and raising awareness of and attention to this issue.

With regard to the antitrust investigations still in progress, details of which can be found in Note 12. Provisions for risks and charges in the Explanatory Notes to the Half-Year Financial Report, the Group has a provision for risks and charges as at 30 June 2019 of approximately Euro 260 million. Despite the uncertainty of the outcome of the investigations in progress and potential legal action by customers as a result of the European Commission's decision adopted in April 2014, as described in the Explanatory Notes (Note 12. Provisions for risks and charges), the amount of this provision is considered to represent the best estimate of the liability based on the information now available.

PLANNING AND REPORTING RISKS

Planning and reporting risks are related to the adverse effects that irrelevant, untimely or incorrect information might have on the Group's strategic, operational and financial decisions. At present, in view of the reliability and effectiveness of internal procedures for reporting and planning, the Group does not consider these risks to be relevant.

RELATED PARTY TRANSACTIONS

Related party transactions do not qualify as either atypical or unusual but form part of the normal course of business by Group companies. Such transactions take place under market terms and conditions, according to the type of goods and services provided.

Information about related party transactions, including that required by the Consob Communication dated 28 July 2006, is presented in Note 21 of the Explanatory Notes.

Milan, 1 August 2019

ON BEHALF OF THE BOARD OF DIRECTORS

THE CHAIRMAN Claudio De Cnto

CONSOLIDATED FINANCIAL STATEMENTS AND

EXPLANATORY NOTES

PRYSMIAN GROUP | DIRECTORS' REPORT

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(in millions of Euro)
	Note	30 June 2019	of which related parties (Note 21)	31 December 2018 (*)	of which related parties (Note 21)
Non-current assets
Property, plant and equipment	1	2,749		2,629
Intangible assets	1	2,147		2,162
Equity-accounted investments	2	307	307	294	294
Other investments at fair value through other comprehensive income		13		13
Financial assets at amortised cost		4		5
Derivatives	5	1		2
Deferred tax assets		201		190
Other receivables	3	41		33
Total non-current assets		5,463		5,328
Current assets
Inventories	4	1,666		1,511
Trade receivables	3	1,898	5	1,635	3
Other receivables	3	913	2	667	5
Financial assets at fair value through profit or loss	6	20		25
Derivatives	5	16		19
Financial assets at fair value through other comprehensive income		11		10
Cash and cash equivalents	7	530		1,001
Total current assets		5,054		4,868
Assets held for sale	8	10		3
Total assets		10,527		10,199
Equity attributable to the Group:		2,242		2,186
Share capital	9	27		27
Reserves	9	2,025		2,101
Net profit/(loss) for the period		190		58
Equity attributable to non-controlling interests:		185		188
Share capital and reserves		183		188
Net profit/(loss) for the period		2		-
Total equity		2,427		2,374
Non-current liabilities
Borrowings from banks and other lenders	10	2,860		3,161
Other payables	11	14		12
Provisions for risks and charges	12	44		51
Derivatives	5	20		9
Deferred tax liabilities		237		238
Employee benefit obligations	13	528		463
Total non-current liabilities		3,703		3,934
Current liabilities
Borrowings from banks and other lenders	10	516		98
Trade payables	11	2,246	2	2,132	5
Other payables	11	940	2	953	1
Derivatives	5	31		41
Provisions for risks and charges	12	630	4	635	4
Current tax payables		34		32
Total current liabilities		4,397		3,891
Total liabilities		8,100		7,825
Total equity and liabilities		10,527		10,199

(*) The previously published comparative Consolidated Financial Statements have been revised after finalising the General Cable purchase price allocation. More details can be found in Section C. Restatement of comparative figures.

CONSOLIDATED INCOME STATEMENT

(in millions of Euro)
	Note	1st half 2019	of which related parties (Note 21)	1st half 2018 (*)	of which related parties (Note 21)
Sales of goods and services		5,849	15	4,364	17
Change in inventories of work in progress, semi-finished and finished goods		97		70
Other income		24	2	47	2
Raw materials, consumables used and goods for resale		(3,730)	(6)	(2,903)	(9)
Fair value change in metal derivatives		-		(25)
Personnel costs		(745)	(5)	(564)	(9)
of which personnel costs for company reorganisation		(5)		(12)
of which personnel costs for stock option fair value		(1)		(14)
Amortisation, depreciation, impairment and impairment reversals		(156)		(96)
of which other impairment		(1)		(1)
Other expenses		(1,017)	-	(771)
of which non-recurring (other expenses) and releases		(6)		-
of which (other expenses) for company reorganisation		(2)		(2)
Share of net profit/(loss) of equity-accounted companies		13	13	36	36
Operating income	14	335		158
Finance costs	15	(209)		(217)
of which non-recurring finance costs		(1)		(1)
Finance income	15	137		171
Profit/(loss) before taxes		263		112
Taxes	16	(71)		(32)
Net profit/(loss) for the period		192		80
Attributable to:
Owners of the parent		190		80
Non-controlling interests		2		-

Basic earnings/(loss) per share (in Euro)	17	0.72		0.35
Diluited earnings/(loss) per share (in Euro)	17	0.72		0.35

CONSOLIDATED INCOME STATEMENT - 2ND QUARTER (*)

(in millions of Euro)
	2nd quarter 2019	2nd quarter 2018 (**)
Sales of goods and services	3,078	2,485
Change in inventories of work in progress, semi-finished and finished goods	(19)	(51)
Other income	12	34
Raw materials, consumables used and goods for resale	(1,878)	(1,594)
Fair value change in metal derivatives	(17)	1
Personnel costs	(375)	(303)
of which personnel costs for company reorganisation	(1)	(10)
of which personnel costs for stock option fair value	-	(5)
Amortisation, depreciation, impairment and impairment reversals	(80)	(52)
Other expenses	(551)	(435)
of which non-recurring (other expenses) and releases	(6)	-
of which (other expenses) for company reorganisation	(2)	(1)
Share of net profit/(loss) of equity-accounted companies	5	16
Operating income	175	101
Finance costs	(91)	(128)
Finance income	57	101
Profit/(loss) before taxes	141	74
Taxes	(38)	(22)
Net profit/(loss) for the period	103	52
Attributable to:
Owners of the parent	102	52
Non-controlling interests	1	-

(*) The figures for 2nd quarter 2019 and 2018 have not been subjected to limited review by the independent auditors.

(**) The previously published comparative Consolidated Financial Statements have been revised after finalising the General Cable purchase price allocation. More details can be found in Section C. Restatement of comparative figures.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(in millions of Euro)
	1st half 2019	1st half 2018 (*)
Net profit/(loss) for the period	192	80
Comprehensive income/(loss) for the period:
- items that may be reclassified subsequently to profit or loss:
Fair value gains/(losses) on cash flow hedges - gross of tax	(10)	(6)
Fair value gains/(losses) on cash flow hedges - tax effect	2	2
Currency translation differences	31	(24)
Total items that may be reclassified, net of tax	23	(28)
- items that will NOT be reclassified subsequently to profit or loss:
Actuarial gains/(losses) on employee benefits - gross of tax	(70)	9
Actuarial gains/(losses) on employee benefits - tax effect	16	(3)
Total items that will NOT be reclassified, net of tax	(54)	6
Total comprehensive income/(loss) for the period	161	58
Attributable to:
Owners of the parent	159	55
Non-controlling interests	2	3

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - 2ND QUARTER (*)

(in millions of Euro)
	2nd quarter 2019	2nd quarter 2018 (**)

Net profit/(loss) for the period	103	54
Comprehensive income/(loss) for the period:
- items that may be reclassified subsequently to profit or loss:
Fair value gains/(losses) on cash flow hedges - gross of tax	(3)	18
Fair value gains/(losses) on cash flow hedges - tax effect	(1)	(6)
Currency translation differences	(53)	6
Total items that may be reclassified, net of tax	(57)	18
- items that will NOT be reclassified subsequently to profit or loss:
Actuarial gains/(losses) on employee benefits - gross of tax	(70)	9
Actuarial gains/(losses) on employee benefits - tax effect	16	(3)
Total items that will NOT be reclassified, net of tax	(54)	6
Total comprehensive income/(loss) for the period	(8)	78
Attributable to:
Owners of the parent	(5)	69
Non-controlling interests	(3)	9

(*) The figures for 2nd quarter 2019 and 2018 have not been subjected to limited review by the independent auditors.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(in millions of Euro)
	Share capital	Cash flow hedge reserve	Currency translation reserve	Other reserves	Net profit/ (loss) for the period	Equity attributable to the Group	Non controlling interests	Total
Balance at 31 December 2017	22	(5)	(299)	1,492	241	1,451	188	1,639
Allocation of prior year net result	-	-	-	241	(241)	-	-	-
Fair value - stock options	-	-	-	14	-	14		14
Dividend distribution	-	-	-	(96)	-	(96)	(8)	(104)
Change of scope of consolidation	-	-	-	-	-	-	2	2
Non-controlling interests purchased in subsidiaries	-	-	-	-	-	-	-	-
Capital contributions by non controlling interests	-	-	-	-	-	-	-	-
Conversion of Convertible Bond	2	-	-	281	-	283	-	283
Total comprehensive income/(loss) for the period	-	(2)	(29)	6	80	55	3	58
Balance at 30 June 2018 (*)	24	(7)	(328)	1,938	80	1,707	185	1,892

(in millions of Euro)	Share capital	Cash flow hedge reserve	Currency translation reserve	Other reserves	Net profit/ (loss) for the period	Equity attributable to the Group	Non controlling interests	Total
Balance at 31 December 2018 (*)	27	(14)	(313)	2,428	58	2,186	188	2,374
Allocation of prior year net result	-	-	-	58	(58)	-	-	-
Fair value - stock options	-	-	-	1	-	1	-	1
Dividend distribution	-	-	-	(113)	-	(113)	(5)	(118)
Incidental expenses for capital increase				(1)	-	(1)	-	(1)
Monetary revaluation for hyperinflation	-	-	-	10	-	10	-	10
Total comprehensive income/(loss) for the period	-	(7)	30	(54)	190	159	2	161
Balance at 30 June 2019	27	(21)	(283)	2,329	190	2,242	185	2,427

CONSOLIDATED STATEMENT OF CASH FLOWS

	(in millions of Euro)
		1st half 2019	of which related parties (Note 21)	1st half 2018 (*)	of which related parties (Note 21)
	Profit/(loss) before taxes	263		112
	Depreciation, impairment and impairment reversals of property, plant and equipment	120		72
	Amortisation and impairment of intangible assets	36		24
	Net gains on disposal of property, plant and equipment, intangible assets and on dilution of interests in associates and other non– monetary movements	(1)		(1)
	Share of net profit/(loss) of equity-accounted companies	(13)	(13)	(36)	(36)
	Share-based payments	1		14
	Fair value change in metal derivatives and other fair value items	-		25
	Net finance costs	72		46
	Changes in inventories	(151)		(128)
	Changes in trade receivables/payables	(163)	(5)	(37)	9
	Changes in other receivables/payables	(202)	4	(168)	(6)
	Taxes paid	(44)		(45)
	Dividends received from equity-accounted companies	2	2	4	4
	Utilisations of provisions (including employee benefit obligations)	(47)		(28)
	Increases and releases of provisions (including employee benefit obligations) and other movements	(41)		56
A.	Net cash flow provided by/(used in) operating activities	(168)		(90)
	Cash flow from acquisitions and/or disposals	-		(1,208)
	Investments in property, plant and equipment	(82)		(101)
	Disposals of property, plant and equipment and assets held for sale	3		4
	Investments in intangible assets	(9)		(6)
	Investments in financial assets at fair value through profit or loss	-		(1)
	Disposals of financial assets at fair value through profit or loss	5		16
	Disposals of financial assets at amortised cost	1		-
B.	Net cash flow provided by/(used in) investing activities	(82)		(1,296)
	Incidental expenses for capital increase	(1)		-
	Dividend distribution	(118)		(103)
	Repayment of EIB Loan	(9)		(9)
	Loans for acquisition	-		1,700
	Repayment of Loans for acquisition	(100)		-
	Proceeds of Mediobanca loan	100		-
	Revolving credit facility	-		500
	Repayment of General Cable Convertible Bond	-		(313)
	Finance costs paid (1)	(194)		(187)
	Finance income received (2)	127		148
	Changes in other net financial receivables/payables (3)	(28)		(864)
C.	Net cash flow provided by/(used in) financing activities	(223)		872
D.	Currency translation gains/(losses) on cash and cash equivalents	1		(19)
E.	Total cash flow provided/(used) in the period (A+B+C+D)	(472)		(533)
F.	Net cash and cash equivalents at the beginning of the period	1,002		1,335
G.	Net cash and cash equivalents at the end of the period (E+F)	530		802

(1) Finance costs paid of Euro 194 million include interest payments of Euro 40 million in the first six months of 2019 (Euro 32 million in the first six months of 2018).

(2) Finance income received of Euro 127 million includes interest income of Euro 2 million in the first six months of 2019 (Euro 2 million in the first six months of 2018).

(3) Net cash flow provided by/(used in) financing activities includes Euro 21 million in lease payments accounted for in accordance with IFRS 16, classified in the comparative period in net cash flow provided by/(used in) operating activities.

EXPLANATORY NOTES

A. GENERAL INFORMATION

Prysmian S.p.A. ("the Company") is a company incorporated and domiciled in Italy and organised under the laws of the Republic of Italy.

The Company has its registered office in Via Chiese 6, Milan (Italy).

Prysmian S.p.A. was floated on the Italian Stock Exchange on 3 May 2007 and since September 2007 has been included in the FTSE MIB index, comprising the top 40 Italian companies by capitalisation and stock liquidity.

The Company and its subsidiaries (together "the Group" or "Prysmian Group") produce cables and systems and related accessories for the energy and telecommunications industries, and distribute and sell them around the globe.

A.1 SIGNIFICANT EVENTS IN 2019

Finance activities

Mediobanca loan and partial repayment of the Bridge Loan

New revolving credit facility agreement

New industrial projects and initiatives

Development of power transmission grid in Washington D.C.

Contract to develop a new submarine cable system in Canada (Fundy Isles)

Contract to develop cable system for the first "floating" offshore wind farm in France

Contract to develop cable system for a "floating" offshore wind farm in the United States

The Group will be responsible for the design, manufacture, installation and commissioning of an HVAC (High Voltage Alternating Current) cable system composed of two 220 kV three-core cables with extruded XLPE insulation. The project will require a total of 134 km of cables. The submarine cables will be manufactured at the Group's centres of excellence in Pikkala (Finland) and Arco Felice (Italy).Delivery and commissioning of the project are scheduled for 2021.

Dolwin5 project to connect new wind farms to mainland German grid

The submarine and land cables will be manufactured at the Group's centres of excellence in Pikkala (Finland) and Gron (France). Project completion is scheduled for mid-2024.

Other significant events

Antitrust Brazil

In view of the circumstances described, the Directors, assisted by their legal advisors, have already recognised a provision of Euro 68 million in the financial statements at 31 December 2018.

Claims for damages as a result of the European Commission's 2014 decision

Western Link

Some faults in the Western Link interconnector were detected on 19 February 2019 and 6 April 2019, resulting in its temporary switch-off.

Work to repair the above faults was completed in June 2019.

At the date of approving the current Half-Year Financial Report, the cable is in operation.

Approval of financial statements at 31 December 2018 and dividend distribution

B. FORM AND CONTENT

The present half-year condensed consolidated financial statements have been prepared on a going concern basis, since the Directors have assessed that there are no financial, operating or other kind of indicators that might provide evidence of the Group's inability to meet its obligations in the foreseeable future and particularly in the next 12 months.

In particular, the Group's estimates and projections take account of the possible risk factors described in the Directors' Report, and confirm the Prysmian Group's ability to operate as a going concern and to comply with the financial covenants envisaged by some credit agreements.

The Company has prepared the present document in compliance with the International Financial Reporting Standards (IFRS) issued by the IASB and recognised by the European Union in Regulation (EC) 1606/2002 of the European Parliament and Council dated 19 July 2002, and specifically in accordance with IAS 34 - Interim Financial Reporting, and the instructions issued in implementation of art. 9 of Italian Legislative Decree 38/2005. As permitted by IAS 34, the Group has decided to publish its half-year consolidated financial statements and associated explanatory notes in a condensed format.

The information contained in these Explanatory Notes must be read in conjunction with the Directors' Report, an integral part of the Half-Year Financial Report, and the annual IFRS Consolidated Financial Statements at 31 December 2018.

The present Half-Year Financial Report was approved by the Board of Directors of Prysmian S.p.A. on 1 August 2019 and has undergone a limited review by the independent auditors.

Note: all amounts shown in the tables in the following Notes are expressed in millions of Euro, unless otherwise stated.

B.1 FINANCIAL STATEMENTS AND DISCLOSURES

The Group has elected to present its income statement according to the nature of expenses, whereas assets and liabilities in the statement of financial position are classified as current or non-current. The statement of cash flows has been prepared using the indirect method.

The Prysmian Group has prepared the present Half-Year Financial Report at 30 June 2019 in accordance with art. 154-ter of Legislative Decree 58/1998.

When preparing the Half-Year Financial Report, management has made judgements, estimates and assumptions that affect the value of revenues, costs, assets and liabilities and the disclosures relating to contingent assets and liabilities at the reporting date. As estimates, these may differ from the actual results attained in the future. Some valuation processes, particularly more complex ones such as the determination of any impairment losses against the value of property, plant and equipment and intangible assets, are carried out fully only at year end, when all the necessary information is available, unless there are indicators of

impairment that require immediate assessment of a loss in value. No evidence of impairment has been identified during the first half of 2019.

B.2 ACCOUNTING STANDARDS

Accounting standards used to prepare the Half-Year Financial Report

The basis of consolidation, the methods used to translate financial statements into the presentation currency, the accounting standards and the accounting estimates and policies adopted are the same as those used for the consolidated financial statements at 31 December 2018, to which reference should be made for more details, except for:

1. income taxes, which have been recognised using the best estimate of the Group's weighted average tax rate expected for the full year;
1. the accounting standards and amendments discussed below, which have been mandatorily applied with effect from 1 January 2019 after receiving endorsement from the competent authorities.

It should be noted that in 2019, like already in 2018, the companies operating in Argentina and Angola have been treated as belonging to hyperinflationary economies, thus requiring the application of IAS 29 - Reporting in Hyperinflationary Economies.

Accounting standards, amendments and interpretations applied from 1 January 2019

On 13 January 2016, the IASB published the new standard IFRS 16 - Leases in replacement of IAS 17. The new accounting standard has harmonised the accounting treatment of operating and finance leases by lessees. In fact, IFRS 16 requires the lessee to recognise assets and liabilities for both operating and finance leases. At the commencement date of a lease, a lessee shall recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees are required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset.

This standard applies to annual reporting periods beginning on or after 1 January 2019.

The Group has applied the new standard using the modified retrospective approach and excluding leases with a term of less than 12 months, as permitted by the standard; details of the effects on the Group's Statement of Financial Position and Income Statement can be found in the body of the Explanatory Notes.

On 12 October 2017, the IASB published Amendments to IFRS 9: Prepayment Features with Negative Compensation. Under IFRS 9, a debt instrument can be measured at amortised cost or at fair value through other comprehensive income, provided that the contractual cash flows are "solely payments of principal and interest on the principal amount outstanding" (the SPPI criterion) and the instrument is held within the appropriate business model for that classification. The amendments to IFRS 9 clarify that a financial asset passes the SPPI criterion regardless of the event or circumstance that causes the early termination of the

contract and irrespective of which party pays or receives reasonable compensation for the early termination of the contract.

The amendments, which must be applied retrospectively with effect from 1 January 2019, have no impact on the consolidated financial statements of the Group.

On 12 October 2017, the IASB published Amendments to IAS 28: Long-term interests in associates and joint ventures. The amendments clarify that an entity applies IFRS 9 to long-term interests in an associate or joint venture to which the equity method is not applied but that, in substance, form part of the net investment in the associate or joint venture (long-term interests).

This clarification is relevant because it implies that the expected credit loss model in IFRS 9 applies to such long-term interests.

The amendments also clarify that, in applying IFRS 9, an entity does not take account of any losses of the associate or joint venture, or any impairment losses on the net investment, recognised as adjustments to the net investment in the associate or joint venture that arise from applying IAS 28 - Investments in Associates and Joint Ventures.

The amendments must be applied retrospectively and are effective from 1 January 2019. Since the Group does not have such long-term interests in its associates and joint ventures, the amendments have not had an impact on its consolidated financial statements.

On 7 February 2018, the IASB published Amendments to IAS 19: Plan Amendment, Curtailment or Settlement in which it clarifies how to determine pension costs when a defined benefit plan is amended. The amendments specify that when a plan amendment, curtailment or settlement occurs during the annual reporting period, an entity is required to:

o Determine current service cost for the remainder of the period after the plan amendment, curtailment or settlement, using the actuarial assumptions used to remeasure the net defined benefit liability (asset) reflecting the benefits offered under the plan and the plan assets after that event.
o Determine net interest for the remainder of the period after the plan amendment, curtailment or settlement using: the net defined benefit liability (asset) reflecting the benefits offered under the plan and the plan assets after that event; and the discount rate used to remeasure that net defined benefit liability (asset).

The amendments apply to plan amendments, curtailments, or settlements occurring on or after the beginning of the first annual reporting period that begins on or after 1 January 2019.

These amendments apply only to any future plan amendments, curtailments, or settlements of the Group.

New standards, amendments and interpretations of existing standards, not yet mandatory and not adopted early by the Group

At the date of drawing up the present document, there are no new standards, amendments and interpretations of existing standards to report that are not yet mandatory and not adopted early by the Group.

B.3 CHANGES IN THE SCOPE OF CONSOLIDATION

The Group's scope of consolidation includes the financial statements of Prysmian S.p.A. (the Parent Company) and of the companies over which it exercises direct or indirect control, which are consolidated from the date when control is obtained until the date when such control ceases.

Liquidations

On 9 January 2019, the liquidation of the Nicagaruan company Conducen Nicaragua y Compania de Responsabilidad Limitada was completed with its removal from the local company registry.

On 9 May 2019, the liquidation of the Turkish company Tasfiye Halinde Draka Istanbul Asansor İthalat İhracat Üretim Ticaret Ltd. Şti. was completed with its removal from the local company registry.

Mergers

On 25 June 2019, the German companies Draka Cable Wuppertal GmbH and Draka Kabeltechnik GmbH completed their merger into Prysmian Kabel und Systeme GmbH.

For the sake of better understanding the scope of consolidation, the name changes occurring in the period are listed below:

Name changes

On 23 January 2019, the Swedish company Draka Kabel Sverige AB changed its name to Prysmian Group Sverige AB.

Appendix A to these notes contains a list of the companies included in the scope of consolidation at 30 June 2019.

C. RESTATEMENT OF COMPARATIVE FIGURES

General Cable purchase price allocation

After acquiring control of General Cable Corporation on 6 June 2018, the fair values at 31 December 2018 of the assets acquired, liabilities assumed and contingent liabilities were determined on a provisional basis, in accordance with IFRS 3 - Business Combinations, insofar as the related valuation processes were still in progress.

These valuations, subject to revision within twelve months of the acquisition date as permitted by IFRS 3 - Business Combinations, have resulted in the restatement of the Consolidated Financial Statements at 31 December 2018 and of the income statement for the first half of 2018.

Details of these amendments are presented in the following restated statement of financial position at 31 December 2018 and income statement for the first half of 2018.

Consolidated Statement of Financial Position at 31 December 2018

(in millions of Euro)
	31 December 2018 published	Purchase price allocation General Cable	31 December 2018 restated
Non-current assets
Property, plant and equipment	2,629	-	2,629
Intangible assets	2,132	30	2,162
Equity-accounted investments	294	-	294
Other investments at fair value through other comprehensive income	13	-	13
Financial assets at amortised cost	5	-	5
Derivatives	2	-	2
Deferred tax assets	174	16	190
Other receivables	33	-	33
Total non-current assets	5,282	46	5,328
Current assets			-
Inventories	1,515	(4)	1,511
Trade receivables	1,635	-	1,635
Other receivables	669	(2)	667
Financial assets at fair value through profit or loss	25	-	25
Derivatives	19	-	19
Financial assets at fair value through other comprehensive income	10	-	10
Cash and cash equivalents	1,001	-	1,001
Total current assets	4,874	(6)	4,868
Assets held for sale	3	-	3
Total assets	10,159	40	10,199
Equity attributable to the Group:	2,186	-	2,186
Share capital	27	-	27
Reserves	2,101	-	2,101
Net profit/(loss) for the year	58	-	58
Equity attributable to non-controlling interests:	188	-	188
Share capital and reserves	188	-	188
Net profit/(loss) for the year	-	-	-
Total equity	2,374	-	2,374
Non-current liabilities			-
Borrowings from banks and other lenders	3,161	-	3,161
Other payables	12	-	12
Provisions for risks and charges	51	-	51
Derivatives	9	-	9
Deferred tax liabilities	238	-	238
Employee benefit obligations	463	-	463
Total non-current liabilities	3,934	-	3,934
Current liabilities			-
Borrowings from banks and other lenders	98	-	98
Trade payables	2,132	-	2,132
Other payables	990	(37)	953
Derivatives	41	-	41
Provisions for risks and charges	558	77	635
Current tax payables	32	-	32
Total current liabilities	3,851	40	3,891
Total liabilities	7,785	40	7,825
Total equity and liabilities	10,159	40	10,199

Consolidated Income Statement at 30 June 2018

(in millions of Euro)
	1st half 2018 published	Purchase price allocation General Cable	1st half 2018 restated
Sales of goods and services	4,364		4,364
Change in inventories of work in progress, semi-finished and finished goods	70		70
Other income	47		47
Raw materials, consumables used and goods for resale	(2,903)		(2,903)
Fair value change in metal derivatives	(25)		(25)
Personnel costs	(564)		(564)
of which personnel costs for company reorganisation	(12)		(12)
of which personnel costs for stock option fair value	(14)		(14)
Amortisation, depreciation, impairment and impairment reversals	(94)	(2)	(96)
of which other impairment	(1)		(1)
Other expenses	(771)		(771)
of which (other expenses) for company reorganisation	(2)		(2)
Share of net profit/(loss) of equity-accounted companies	36		36
Operating income	160	(2)	158
Finance costs	(217)		(217)
of which non-recurring finance costs	(1)		(1)
Finance income	171		171
Profit/(loss) before taxes	114	(2)	112
Taxes	(32)	-	(32)
Net profit/(loss) for the period	82	(2)	80
Attributable to:
Owners of the parent	82	(2)	80
Non-controlling interests	-		-
Basic earnings/(loss) per share (in Euro)	0.36		0.35
Diluted earnings/(loss) per share (in Euro)	0.36		0.35

Consolidated Statement of Comprehensive Income at 30 June 2018

(in millions of Euro)
	1st half 2018 published	Purchase price allocation General Cable	1st half 2018 restated
Net profit/(loss) for the period	82	(2)	80
Comprehensive income/(loss) for the period
- items that may be reclassified subsequently to profit or loss:
Fair value gains/(losses) on cash flow hedges - gross of tax	(6)		(6)
Fair value gains/(losses) on cash flow hedges - tax effect	2		2
Measurement of financial instruments at fair value through other comprehensive income			-
Currency translation differences	(24)		(24)
Total items that may be reclassified, net of tax	(28)	-	(28)
- items that will NOT be reclassified subsequently to profit or loss:
Actuarial gains/(losses) on employee benefits - gross of tax	9		9
Actuarial gains/(losses) on employee benefits - tax effect	(3)		(3)
Total items that will NOT be reclassified, net of tax	6	-	6
Total comprehensive income/(loss) for the period	60	(2)	58
Attributable to:			-
Owners of the parent	57	(2)	55
Non-controlling interests	3		3

**Consolidated Income Statement - 2nd quarter 2018 (*)**

(in millions of Euro)
	2nd quarter 2018 published	Purchase price allocation General Cable	2nd quarter 2018 restated
Sales of goods and services	2,485		2,485
Change in inventories of work in progress, semi-finished and finished goods	(51)		(51)
of which non-recurring change in inventories of work in progress, semi-finished and finished goods	-		-
Other income	34		34
Raw materials, consumables used and goods for resale	(1,594)		(1,594)
Fair value change in metal derivatives	1		1
Personnel costs	(303)		(303)
of which personnel costs for company reorganisation	(10)		(10)
of which personnel costs for stock option fair value	(5)		(5)
Amortisation, depreciation, impairment and impairment reversals	(50)	(2)	(52)
of which other impairment and impairment reversals	(1)		(1)
Other expenses	(435)		(435)
of which (other expenses) for company reorganisation	(1)		(1)
Share of net profit/(loss) of equity-accounted companies	16		16
of which non–recurring	-		-
Operating income	103	(2)	101
Finance costs	(128)		(128)
Finance income	101		101
Profit/(loss) before taxes	76	(2)	74
Taxes	(22)		(21)
Net profit/(loss) for the period	54	(2)	52
Attributable to:
Owners of the parent	54		52
Non-controlling interests	-		-

(*) The figures for 2nd quarter 2018 have not been subjected to limited review by the independent auditors.

**Consolidated Statement of Comprehensive Income - 2nd quarter 2018 (*)**

(in millions of Euro)
	2nd quarter 2018 published	Purchase price allocation General Cable	2nd quarter 2018 restated

Net profit/(loss) for the period	54	2	52
Comprehensive income/(loss) for the period

- items that may be reclassified subsequently to profit or loss:
Fair value gains/(losses) on cash flow hedges - gross of tax	18		18
Fair value gains/(losses) on cash flow hedges - tax effect	(6)		(6)
Currency translation differences	6		6
Total items that may be reclassified, net of tax	18	-	18
- items that will NOT be reclassified subsequently to profit or loss:
Actuarial gains/(losses) on employee benefits - gross of tax	9		9
Actuarial gains/(losses) on employee benefits - tax effect	(3)		(3)
Total items that will NOT be reclassified, net of tax	6	-	6
Total comprehensive income/(loss) for the period	78	2	76
Attributable to:
Owners of the parent	69	2	67
Non-controlling interests	9	-	9

(*) The figures for 2nd quarter 2018 have not been subjected to limited review by the independent auditors.

D. FINANCIAL RISK MANAGEMENT

The Group's activities are exposed to various forms of risk: market risk (including exchange rate, interest rate and price risks), credit risk and liquidity risk.

The current Half-Year Financial Report does not contain all the information about financial risks presented in the Annual Financial Report at 31 December 2018, which should be consulted for a more detailed analysis.

With reference to the risks described in the Annual Financial Report at 31 December 2018, there have been no changes in the types of risks to which the Group is exposed or in its policies for managing such risks.

(a) Fair value measurement

IFRS 13 requires assets and liabilities recognised in the statement of financial position at fair value to be classified according to a hierarchy that reflects the significance of the inputs used in measuring fair value.

Financial instruments are classified according to the following fair value measurement hierarchy:

Level 1: Fair value is determined with reference to quoted prices (unadjusted) in active markets for identical financial instruments;

Level 2: Fair value is determined using valuation techniques where the input is based on observable market data;

Level 3: Fair value is determined using valuation techniques where the input is not based on observable market data.

(in millions of Euro)

	Level 1	Level 2	Level 3	Total
Assets
Financial assets at fair value:
Derivatives through profit or loss	-	15	-	15
Hedging derivatives	-	2	-	2
Financial assets at amortised cost	-	4	-	4
Financial assets at fair value through profit or loss	20	-	-	20
Financial assets at fair value through other comprehensive income	11	-	-	11
Other investments at fair value through other comprehensive income			13	13

Total assets	31	21	13	65
Liabilities
Financial liabilities at fair value:
Derivatives through profit or loss	-	21	-	21
Hedging derivatives	-	30	-	30
Total liabilities	-	51	-	51

Financial assets classified in fair value Level 3 have reported no significant movements in the period.

Given the short-term nature of trade receivables and payables, their carrying amounts, net of any allowances for impairment, are treated as a good approximation of fair value.

Financial assets at fair value through profit or loss of Euro 20 million, classified in fair value Level 1, refer to funds in which the Brazilian and Argentinian subsidiaries temporarily invest their liquidity.

Financial assets at fair value through other comprehensive income of Euro 11 million, classified in fair value Level 1, refer to Italian government securities.

During the first six months of 2019 there were no transfers of financial assets and liabilities between the different levels of the fair value hierarchy.

(b) Valuation techniques

Level 1: The fair value of financial instruments quoted in an active market is based on market price at the reporting date. The market price used for derivatives is the bid price, while for financial liabilities the ask price is used.

Level 2: Derivative financial instruments classified in this category include interest rate swaps, forward currency contracts and metal derivative contracts that are not quoted in active markets. Fair value is determined as follows:

for interest rate swaps, it is calculated on the basis of the present value of forecast future cash flows;
for forward currency contracts, it is determined using the forward exchange rate at the reporting date, appropriately discounted;
for metal derivative contracts, it is determined using the prices of such metals at the reporting date, appropriately discounted.

Level 3: The fair value of instruments not quoted in an active market is primarily determined using valuation techniques based on estimated discounted cash flows.

E. BUSINESS COMBINATIONS

Prysmian Group acquired control of General Cable Corporation on 6 June 2018. The acquisition date was backdated to the end of May 2018 for accounting purposes.

The total consideration paid for the acquisition was approximately Euro 1,290 million.

Acquisition-related costs amounted to around Euro 19 million, before tax effects of some Euro 5 million. These costs have been expensed to income as "Non-operating expenses", of which Euro 15 million accounted for in 2017 and Euro 4 million in 2018.

In compliance with IFRS 3, the fair value of the assets, liabilities and contingent liabilities has been finalised within twelve months of the acquisition date.

The excess of the purchase consideration over the fair value of net assets acquired has been recognised as goodwill, quantified as Euro 1,115 million.

Such goodwill is primarily justified by the future earnings expected from integrating the two groups, including the benefits of run-rate synergies. As at 30 June 2019, the process of allocating the acquisition purchase price can be considered completed.

Details of the net assets acquired and goodwill are as follows:

(in millions of Euro)

Cash out	1,303
Derivatives (collar) for acquisition	(13)
Acquisition price (A)	1,290
Fair value of net assets acquired (B)	179
Non-controlling interest	2
Goodwill (A-B)	1,113
Purchase consideration	1,290
Cash and cash equivalents held by acquiree	(82)
Acquisition cash flow	1,208

Details of the fair values of the assets/liabilities acquired are as follows:

Property, plant and equipment	890
Intangible assets	323
Assets held for sale	3
Financial assets at amortised cost	3
Derivatives	16
Deferred taxes	(124)
Inventories	642
Trade and other receivables	697
Trade and other payables	(696)
Borrowings from banks and other lenders	(1,315)
Employee benefit obligations and Provisions for risks and charges	(342)
Cash and cash equivalents	82
Net assets acquired (B)	179

There now follow some brief comments about the fair value measurement performed as part of the purchase price allocation process.

Property, plant and equipment

The fair value measurement has increased book value by Euro 464 million.

Intangible assets

The fair value measurement has identified the following higher values of intangible assets:

Customer relationships: Euro 232 million (amortised over a useful life of between 3 and 20 years);
Trademarks: Euro 51 million (amortised over a useful life of 10 years);
Technology: Euro 39 million (amortised over a useful life of between 4 and 5 years);
Order book: Euro 2 million (amortised over a useful life of 1 year).

"Goodwill" and other intangible assets previously recorded in the General Cable financial statements, amounting to Euro 27 million, have been cancelled against the above higher values.

Trade and other receivables, Trade and other payables

Trade and other receivables and trade and other payables have been measured at fair value.

Inventories

The fair value measurement has increased book value by Euro 16 million due to the recognition of an inventory step-up for production profit margins.

Provisions for risks

The fair value measurement has increased book value by Euro 125 million in connection with contingent liabilities.

Deferred taxes

The variation reflects recognition of the tax effect of all the above differences against book value.

F. SEGMENT INFORMATION

These changes have caused the operating segments to be redesigned as follows:

Energy, whose smallest identifiable CGU is the Region; this segment encompasses the former Energy Products segment as well as the Core Oil&Gas and DHT businesses included in the comparative period in the OIL&GAS segment no longer significant for the Group.
Projects, whose smallest identifiable CGUs are the High Voltage, Submarine Power, Submarine Telecom and Offshore Specialties businesses; this segment encompasses the former Energy Projects segment, the Offshore Specialties business (previously included in the OIL&GAS segment no longer significant for the Group) and the Submarine Telecom business, new to the Group following the acquisition of General Cable;
Telecom, whose smallest CGU continues to be the operating segment itself. This segment has not undergone any changes as a result of the above reorganisation.

The new operating segments are: Energy, Projects and Telecom; the figures for the comparative period have been restated accordingly. The comparative figures also reflect a reclassification within the Energy operating segment between the E&I and Industrial & NWC businesses for better allocation of the figures of the Omani subsidiary.

Segment information is structured in the same way as the report periodically prepared for the purpose of reviewing business performance. This report presents operating performance by macro type of business (Energy, Projects and Telecom) and the results of operating segments primarily on the basis of Adjusted EBITDA, defined as earnings (loss) for the period before non-recurring items, the fair value change in metal price derivatives and in other fair value items, amortisation, depreciation and impairment, finance costs and income and taxes. This report also provides information about the statement of financial position for the Group as a whole but not by operating segment.

In order to provide users of the financial statements with clearer information, certain economic data is also reported by sales channels and business areas within the individual operating segments:

A) Projects operating segment: encompassing the following high-tech and high value-added businesses whose focus is on projects and their execution, as well as on product customisation: High Voltage, Submarine Power, Submarine Telecom and Offshore Specialties.
B) Energy operating segment: encompassing the businesses offering a complete and innovative product portfolio designed to meet the various and many needs of the market, namely:
- 1. Energy & Infrastructure (E&I): this includes Trade and Installers, Power Distribution and Overhead lines;
- 1. Industrial & Network Components: this comprises Specialties and OEM, Elevators, Automotive, Network Components, core Oil & Gas and DHT;

3. Other: occasional sales of residual products.

C) Telecom operating segment: producing cable systems and connectivity products used in telecommunication networks. This segment is organised in the following lines of business: optical fibre, optical cables, connectivity components and accessories, OPGW (Optical Ground Wire) and copper cables.

All Corporate fixed costs are allocated to the Projects, Energy and Telecom operating segments. Revenues and costs are allocated to each operating segment by identifying all revenues and costs directly attributable to that segment and by allocating indirect costs on the basis of Corporate resources (personnel, space used, etc.) absorbed by the operating segments.

Group operating activities are organised and managed separately according to the nature of the products and services provided: each segment offers different products and services to different markets. Sales of goods and services are analysed geographically on the basis of the location of the registered office of the company that issues the invoices, regardless of the geographic destination of the products sold. This type of presentation does not produce significantly different results from analysing sales of goods and services by destination of the products sold. All transfer prices are set using the same conditions applied to other transactions between Group companies and are generally determined by applying a mark-up to production costs.

Assets and liabilities by operating segment are not included in the data reviewed by management and so, as permitted by IFRS 8, this information is not presented in the current report.

It should be noted that the previously published comparative figures have been restated to reflect the redefinition of the operating segments described above.

F.1 OPERATING SEGMENTS

The following tables present information by operating segment:

(in millions of Euro)								1st half 2019
	Projects	Energy			Telecom	Corporate	Group
		E&I	Industrial & NWC	Other	Total Energy			total
Sales (1)	828	2,763	1,248	124	4,135	886	-	5,849
Adjusted EBITDA before share of net profit/(loss) of equity-accounted companies	97	158	98	2	258	153	-	508
% of sales	11.7%	5.7%	7.8%		6.2%	17.2%		8.7%
Adjusted EBITDA (A)	97	159	98	2	259	165	-	521
% of sales	11.7%	5.8%	7.9%		6.3%	18.6%		8.9%
EBITDA (B)	88	156	92	1	249	162	(7)	492
% of sales	10.8%	5.7%	7.5%		6.0%	18.3%		8.4%
Amortisation and depreciation (C)	(31)	(61)	(27)	(2)	(90)	(34)	-	(155)
Adjusted operating income (A+C)	66	98	71	-	169	131	-	366
% of sales	7.0%	3.4%	5.3%		3.9%	14.5%		6.3%
Fair value change in metal derivatives (D)								-
Fair value stock options (E)								(1)
Asset (impairment) and impairment reversal (F)								(1)
Operating income (B+C+D+E+F)								335
% of sales								5.7%
Finance income								137
Finance costs								(209)
Taxes								(71)
Net profit/(loss) for the period								192
% of sales								3.3%
Attributable to:
Owners of the parent								190
Non-controlling interests								2
RECONCILIATION BETWEEN EBITDA AND ADJUSTED EBITDA
EBITDA (A)	88	156	92	1	249	162	(7)	492
Adjustments:
Company reorganisation	(2)	1	6	-	7	2	-	7
of which General Cable integration costs	(3)	2	-	-	2	-	-	(1)
Non-recurring expenses/(income):	6	-	-	-	-	-	-	6
of which Antitrust	6	-	-	-	-	-	-	6
Other non-operating expenses/(income)	5	2	-	1	3	1	7	16
of which General Cable integration costs	-	-	-	-	-	-	2	2
Total adjustments (B)	9	3	6	1	10	3	7	29
Adjusted EBITDA (A+B)	97	159	98	2	259	165	-	521

(1) Sales of the operating segments and business areas are reported net of intercompany transactions and net of transactions between operating segments, consistent with the presentation adopted in the regularly reviewed reports.

(in millions of Euro)								1st half 2018 (*)
	Projects			Energy			Corporate	Group
		E&I	Industrial & NWC	Other	Total Energy			total
Sales (1)	747	1,823	1,015	97	2,935	682	-	4,364
Adjusted EBITDA before share of net profit/(loss) of equity-accounted companies	58	70	66	(1)	135	110	-	303
% of sales	7.7%	3.9%	6.5%		4.6%	16.2%		6.9%
Adjusted EBITDA (A)	58	72	66	(1)	137	144	-	339
% of sales	7.7%	3.9%	6.5%		4.7%	21.1%		7.8%
EBITDA (B)	56	62	61	(1)	122	139	(24)	293
% of sales	7.4%	3.4%	6.0%		4.2%	20.3%		6.7%
Amortisation and depreciation (C)	(24)	(31)	(16)	(1)	(48)	(23)	-	(95)
Adjusted operating income (A+C)	34	41	50	(2)	89	121	-	244
% of sales	4.5%	2.2%	4.9%		3.0%	17.7%		5.7%
Fair value change in metal derivatives (D)								(25)
Fair value stock options (E)								(14)
Asset (impairment) and impairment reversal (F)	(1)							(1)
Operating income (B+C+D+E+F)								158
% of sales								3.7%
Finance income								171
Finance costs								(217)
Taxes								(32)
Net profit/(loss)								80
% of sales								1.9%
Attributable to:
Owners of the parent								80
Non-controlling interests								-
RECONCILIATION BETWEEN EBITDA AND ADJUSTED EBITDA
EBITDA (A)	56	62	61	(1)	122	139	(24)	293
Adjustments:
Company reorganisation	2	4	4	-	8	3	1	14
of which General Cable integration costs	-	3	1	-	4	-	1	5
Other non-operating expenses/(income)	-	6	1	-	7	2	23	32
of which General Cable acquisition related costs	-	-	-	-	-	-	4	4
of which General Cable integration costs	-	-	-	-	-	-	18	18
of which release of General Cable inventory step-up2)	-	3	1	-	4	1	-	5
Total adjustments (B)	2	10	5	-	15	5	24	46
Adjusted EBITDA (A+B)	58	72	66	(1)	137	144	-	339

(2) Reflects the higher cost of using finished goods and raw materials measured at General Cable's acquisition-date fair value.

(*)The previously published comparative Consolidated Financial Statements have been revised after finalising the General Cable purchase price allocation. More details can be found in Section C. Restatement of comparative figures.

F.2 GEOGRAPHICAL AREAS

The following table presents sales of goods and services by geographical area:

(in millions of Euro)
	1st half 2019	1st half 2018

Sales of goods and services	5,849	4,364

EMEA*	3,147	2,835
(of which Italy)	576	601
North America	1,751	771
Latin America	466	277
Asia Pacific	485	481

(*) EMEA = Europe, Middle East and Africa

1. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS

Details of this line item and related movements are as follows:

(in millions of Euro)

	Property, plant and equipment	Intangible assets (*)	of which Goodwill (*)

Balance at 31 December 2018	2,629	2,162	1,571
Movements in 2019:
- Investments	82	9	-
- Increases for leases (IFRS 16)	159	-	-
- Disposals	(2)
- Depreciation and amortisation	(119)	(36)	-
- Impairment	(1)	-	-
- Currency translation differences	9	9	5
- Reclassifications (to)/from Assets held for sale	(7)	-	-
- Monetary revaluation for hyperinflation	3	-	-
- Other	(4)	3	-
Total movements	120	(15)	5
Balance at 30 June 2019	2,749	2,147	1,576
Of which:
- Historical cost	4,275	2,618	1,596
- Accumulated depreciation/amortisation and impairment	(1,526)	(471)	(20)
Net book value	2,749	2,147	1,576

(in millions of Euro)
	Property, plant and equipment	Intangible assets (*)	of which Goodwill

Balance at 31 December 2017	1,646	735	438
Movements in 2018:
- Business combinations	892	1,479	1,113
- Investments	101	6	-
- Disposals	(3)	-	-
- Depreciation and amortisation	(71)	(24)	-
- Impairment	(1)	-	-
- Currency translation differences	(8)	10	4
- Reclassifications (to)/from Assets held for sale	(2)	-	-
Total movements	908	1,471	1,117
Balance at 30 June 2018	2,554	2,206	1,555
Of which:
- Historical cost	3,877	2,606	1,575
- Accumulated depreciation/amortisation and impairment	(1,323)	(400)	(20)
Net book value	2,554	2,206	1,555

Investments in property, plant and equipment amount to Euro 82 million in the first six months of 2019, while those in intangible assets amount to Euro 9 million (mostly for IT projects). This expenditure is analysed as follows:

58%, or Euro 53 million, for projects to increase and rationalise production capacity and develop new products;
16%, or Euro 14 million, for projects to improve industrial efficiency;
26%, or Euro 24 million, for IT implementation projects and structural work.

Increases of Euro 159 million for finance leases refer to property, plant and equipment recorded upon adoption of IFRS 16, which has given rise to Euro 19 million in depreciation, meaning that Property, plant and equipment report a net increase of Euro 141 million at 30 June 2019 as a result of adopting IFRS 16. This standard has also involved the recognition at 30 June 2019 of Euro 141 million in financial liabilities and Euro 2 million in finance costs.

There are liens of Euro 1 million on machinery serving as security against long-term loans (Euro 4.4 million at 31 December 2018).

2. EQUITY-ACCOUNTED INVESTMENTS

These are detailed as follows:

(in millions of Euro)
	30 June 2019	31 December 2018
Investments in associates	302	289
Investments in joint ventures	5	5
Total equity-accounted investments	307	294

Investments in associates

Information about the main investments in associates:

Company name	Registered office	% owned
Yangtze Optical Fibre and Cable Joint Stock Limited Company	China	23.73%
Yangtze Optical Fibre & Cable (Shanghai) Co. Ltd	China	42.80%
Kabeltrommel Gmbh & Co.K.G.	Germany	43.18%
Elkat Ltd.	Russia	40.00%

Yangtze Optical Fibre and Cable Joint Stock Limited Company is a Chinese company formed in 1988 whose main shareholders are: China Huaxin Post and Telecommunication Economy Development Center, Wuhan Yangtze Communications Industry Group Company Ltd. and Prysmian Group. The company is one of the industry's most important manufacturers of optical fibre and cables. Its products and solutions are sold in more than 50 countries, including the United States, Japan, the Middle East and Africa.

The company was listed on the Main Board of the Hong Kong Stock Exchange in December 2014 and in July 2018 it was also listed on the Shanghai Stock Exchange.

At 30 June 2019, the fair value of the investment in Yangtze Optical Fibre and Cable Joint Stock Limited Company was Euro 325 million (based on the price quoted on the Hong Kong market), compared with a carrying amount of Euro 258 million.

Yangtze Optical Fibre & Cable (Shanghai) Co. Ltd, formed in 2002 and based in Shanghai (China), is an associated company, 25% of whose share capital is held by Prysmian Group and 75% by Yangtze Optical Fibre and Cable Joint Stock Limited Company. The company specialises in the manufacture and sale of optical fibre and cables, offering a wide range of optical fibre cables and accessories, services and FTTx solutions.

Kabeltrommel Gmbh & Co. K.G. is a German company that heads a consortium for the production, procurement, management and sale of disposable and reusable cable carrying devices (drums). The services offered by the company include both the sale of cable drums, and the complete management of logistics services such as drum shipping, handling and subsequent retrieval. The company operates primarily in the German market.

Elkat Ltd. is based in Russia and manufactures and sells copper conductors; it is the only company certified by the LME to test copper cathodes for the local market.

The change in Investments in associates during the period primarily reflects the Group's share of profit or loss of associates.

Investments in joint ventures

Information about the nature of the main investments in joint ventures:

Company name	Registered office	% owned
Power Cables Malaysia Sdn Bhd	Malaysia	40.00%
Precision Fiber Optics Ltd	Japan	50.00%

Power Cables Malaysia Sdn Bhd is a joint venture based in Malaysia between Prysmian Group and Lembaga Tabung Angkatan Tentera (LTAT), a Malaysian government retirement benefits fund. The company, a leader in the local market, manufactures and sells power cables and conductors and is mainly specialised in high voltage products.

Precision Fiber Optics Ltd., based in Japan, manufactures and sells optical fibre cables in the local market.

3. TRADE AND OTHER RECEIVABLES

These are detailed as follows:

(in millions of Euro)
	Non-current	Current	30 June 2019 Total

Trade receivables	-	1,988	1,988
Allowance for doubtful accounts	-	(90)	(90)
Total trade receivables	-	1,898	1,898
Other receivables:
Tax receivables	7	182	189
Financial receivables	2	7	9
Prepaid finance costs	4	2	6
Receivables from employees	2	2	4
Pension plan receivables	-	4	4
Construction contracts	-	601	601
Advances to suppliers	4	20	24
Other	21	96	117
Total other receivables	40	914	954
Total	40	2,812	2,852

(in millions of Euro)

31 December 2018 (*)
	Non-current	Current	Total
Trade receivables	-	1,723	1,723
Allowance for doubtful accounts	-	(88)	(88)
Total trade receivables	-	1,635	1,635
Other receivables:
Tax receivables	6	158	164
Financial receivables	2	7	9
Prepaid finance costs	-	1	1
Receivables from employees	2	2	4
Pension plan receivables	-	1	1
Construction contracts	-	360	360
Advances to suppliers	4	23	27
Other	19	115	134
Total other receivables	33	667	700
Total	33	2,302	2,335

4. INVENTORIES

These are detailed as follows:

(in millions of Euro)
	30 June 2019	31 December 2018 (*)
Raw materials	482	442
of which allowance for obsolete and slow-moving raw materials	(47)	(39)
Work in progress and semi-finished goods	410	356
of which allowance for obsolete and slow-moving work in progress and semi-finished goods	(15)	(13)
Finished goods (**)	774	713
of which allowance for obsolete and slow-moving finished goods	(78)	(67)
Total	1,666	1,511

(**) Finished goods also include goods for resale.

5. DERIVATIVES

These are detailed as follows:

(in millions of Euro)
		30 June 2019
	Asset	Liability
Non-current
Interest rate derivatives (cash flow hedges)	-	17
Forward currency contracts on financial transactions (cash flow hedges)	-	-
Forward currency contracts on commercial transactions (cash flow hedges)	-	1
Total hedging derivatives	-	18
Metal derivatives	1	2
Total other derivatives	1	2
Total non-current	1	20
Current
Interest rate derivatives (cash flow hedges)		7
Forward currency contracts on commercial transactions (cash flow hedges)	2	5
Total hedging derivatives	2	12
Forward currency contracts on commercial transactions	3	4
Forward currency contracts on financial transactions	2	1
Metal derivatives	9	14
Total other derivatives	14	19
Total current	16	31
Total	17	51

(in millions of Euro)
	31 December 2018
Asset	Liability
Non-current
Interest rate derivatives (cash flow hedges) -	8
Total hedging derivatives -	8
Metal derivatives 2	1
Total other derivatives 2	1
Total non-current 2	9
Current
Interest rate derivatives (cash flow hedges) -	6
Forward currency contracts on commercial transactions (cash flow hedges) 3	10
Total hedging derivatives 3	16
Forward currency contracts on commercial transactions 4	8
Forward currency contracts on financial transactions 2	2
Metal derivatives 10	15
Total other derivatives 16	25
Total current 19	41
Total 21	50

Interest rate derivatives designated as cash flow hedges refer to:

interest rate swaps, for an overall notional value of Euro 1,000 million, with the objective of hedging variable rate interest rate flows for the period 2018-2023 on financing contracted by the Group to acquire General Cable;
interest rate swaps, for an overall notional value of Euro 300 million, with the objective of hedging variable rate interest rate flows for the period 2018-2020 on financing contracted by the Group to acquire General Cable;
interest rate swaps for an overall notional value of Euro 110 million, with the objective of hedging variable interest rate flows over the period 2018-2024 on an existing loan.

6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at fair value through profit or loss, amounting to Euro 20 million (Euro 25 million at 31 December 2018), basically refer to units in funds that mainly invest in short and medium-term government securities. The subsidiaries that invest temporarily available liquidity in such funds are primarily those in Brazil and Argentina.

7. CASH AND CASH EQUIVALENTS

These are detailed as follows:

(in millions of Euro)
	30 June 2019	31 December 2018
Cash and cheques	2	-
Bank and postal deposits	528	1,001
Total	530	1,001

Cash and cash equivalents, deposited with major financial institutions, are managed centrally through the Group's treasury company and in its various operating units.

Cash and cash equivalents managed by the Group's treasury company amount to Euro 205 million at 30 June 2019, compared with Euro 630 million at 31 December 2018.

8. ASSETS HELD FOR SALE

These are detailed as follows:

(in millions of Euro)
	30 June 2019	31 December 2018
Assets held for sale:
Lands	5	2
Buildings	5	1
Total	10	3

At 30 June 2019 assets held for sale primarily refer to the plant in Delfzijl and the offices in Barcelona. Assets held for sale are classified in Level 3 of the fair value hierarchy.

9. SHARE CAPITAL AND RESERVES

Consolidated equity has recorded a positive change of Euro 53 million since 31 December 2018, mainly reflecting the net effect of:

positive currency translation differences of Euro 31 million;
a negative post-tax change of Euro 8 million in the fair value of derivatives designated as cash flow hedges;
a reduction of Euro 54 million in the reserves for actuarial gains/(losses) on employee benefits;
a positive change of Euro 1 million in the share-based compensation reserve linked to stock option plans;
the net profit for the period of Euro 192 million;
an increase of Euro 10 million for the effects of hyperinflation;
a decrease of Euro 118 million for the distribution of dividends;
a decrease of Euro 1 million for incidental expenses for the capital increase.

At 30 June 2019, the share capital of Prysmian S.p.A. comprises 268,144,246 shares, each of nominal value Euro 0.10 for a total of Euro 26,814,424.60.

Movements in the ordinary shares and treasury shares of Prysmian S.p.A. are reported in the following table:

	Ordinary shares	Treasury shares	Total
Balance at 31 December 2017	217,482,754	(6,494,881)	210,987,873
Capital increase (1)	50,661,492	-	50,661,492
Share buyback		-	-
Allotments and sales (2)	-	1,397,668	1,397,668
Balance at 31 December 2018	268,144,246	(5,097,213)	263,047,033
	Ordinary shares	Treasury shares	Total
Balance at 31 December 2018	268,144,246	(5,097,213)	263,047,033
Allotments and sales (3)	-	62,128	62,128
Balance at 30 June 2019	268,144,246	(5,035,085)	263,109,161

(1) Issue of new shares serving the capital increase (32,652,314 shares), the conversion of the Convertible Bond 2013 (12,677,769 shares) and the long-term incentive plan (LTI Plan) for Group employees (5,331,409 shares).

(2)Allotment and/or sale of treasury shares to serve the long-term incentive plan (LTI Plan) for Group employees (1,278,001 shares allotted) and the YES Group employee share purchase plan (87,540 shares allotted, and 32,127 shares sold).

(3) Allotment and/or sale of treasury shares under the YES Group employee share purchase plan (62,128 shares).

Treasury shares

The following table reports movements in treasury shares during the period:

	Number of shares	Total nominal value (in Euro)	% of share capital	Average unit value (in Euro)	Total carrying value (in Euro)
Balance at 31 December 2017	6,494,881	649,488	2.99%	20.23	131,387,074
- Allotments and sales	(1,397,668)	(139,767)	-	19.92	(27,841,547)
Balance at 31 December 2018	5,097,213	509,722	1.90%	20.31	103,545,528
- Allotments and sales	(62,128)	(6,213)		19.92	(1,237,590)
Balance at 30 June 2019	5,035,085	503,509	1.88%	20.31	102,307,938

Authorisation to buy and dispose of treasury shares

The Shareholders' Meeting of Prysmian S.p.A. held on 5 June 2019 authorised a buyback and disposal of treasury shares, revoking at the same time the previous authorisation under the shareholder resolution dated 12 April 2018. The authorisation provides the opportunity to purchase, on one or more occasions, a maximum number of ordinary shares whose total must not exceed, at any one time, 10% of share capital. Purchases may not exceed the amount of undistributed earnings and available reserves reported in the most recently approved annual financial statements. The authorisation to buy back treasury shares lasts for 18 months commencing from the date of the Shareholders' Meeting, while the authorisation to dispose of treasury shares has no time limit.

10. BORROWINGS FROM BANKS AND OTHER LENDERS

These are detailed as follows:

(in millions of Euro)			30 June 2019
	Non current	Current	Total
Borrowings from banks and other lenders	238	69	307
Term Loan	994	1	995
Bridge Loan	-	401	401
Unicredit Loan	199	-	199
Mediobanca Loan	100	-	100
Non-convertible bond	746	4	750
Convertible Bond 2017	472	-	472
Lease obligations	111	41	152
Total	2,860	516	3,376
(in millions of Euro)			31 December 2018

	Non-current	Current	Total
Borrowings from banks and other lenders	246	82	328
Term Loan	993	1	994
Bridge Loan	500	-	500
Unicredit Loan	199	-	199
Mediobanca Loan	-	-	-
Non-convertible bond	745	14	759
Convertible Bond 2017	467	-	467
Finance lease obligations	11	1	12

Borrowings from banks and other lenders and Bonds are analysed as follows:

(in millions of Euro)	30 June 2019	31 December 2018
CDP Loan	100	100
EIB Loans	143	152
Term Loan	995	994
Bridge Loan	401	500
Unicredit Loan	199	199
Mediobanca Loan	100	-
Other borrowings	64	76
Borrowings from banks and other lenders	2,002	2,021
Non-convertible bond	750	759
Convertible Bond 2017	472	467
Total	3,224	3,247

The Group's principal credit agreements in place at the reporting date are as follows:

Syndicated Revolving Credit Facility 2019 and Syndicated Revolving Credit Facility 2014

At 30 June 2019, the Syndicated Revolving Credit Facility 2019 was not being used.

EIB Loans

On 18 December 2013, Prysmian S.p.A. entered into a first loan agreement with the European Investment Bank (EIB) for Euro 100 million, to fund the Group's research & development (R&D) programmes in Europe over the period 2013-2016.

The EIB Loan was particularly intended to support projects developed in the Group's R&D centres in six countries (France, Great Britain, the Netherlands, Spain, Germany and Italy) and represented about 50% of the Prysmian Group's investment expenditure in Europe during the period concerned.

The EIB Loan, received on 5 February 2014, is repayable in 12 equal half-yearly instalments commencing 5 August 2015 and ending 5 February 2021.

On 10 November 2017, Prysmian S.p.A. entered into a second loan agreement with the EIB for Euro 110 million to support the Group's R&D programmes in Europe over the period 2017-2020. The loan was received on 29 November 2017 and involves a bullet repayment at maturity on 29 November 2024. Interest rate swaps have been arranged in respect of this loan, for an overall notional value of Euro 110 million, with the objective of hedging variable interest rate flows over the period 2018-2024.

At 30 June 2019, the fair value of the EIB Loans approximates the related carrying amount. Fair value has been determined using valuation techniques that refer to observable market data (Level 2 of the fair value hierarchy).

After repayments against the EIB Loan 2013, the outstanding balance on the EIB loans as at 30 June 2019 was Euro 143 million.

Loan from Cassa Depositi e Prestiti (CDP)

On 25 September 2017, Prysmian S.p.A. entered into an agreement with Cassa Depositi e Prestiti S.p.A. for a medium/long-term cash loan for a maximum total amount of Euro 100 million. This loan, maturing on 30 September 2020, was drawn down in its entirety on 29 September 2017. It will be used solely for the Group's general purposes, including capital expenditure, expenditure on research, development and innovation, as well as on energy efficiency and environmental stewardship. At 30 June 2019, the fair value of the CDP Loan approximates the related carrying amount.

Financing for the General Cable acquisition

On 2 March 2018, Prysmian S.p.A. entered into a credit agreement (the Acquisition Financing Agreement) with the object of obtaining the financial resources needed to pay the consideration for the acquisition of General Cable, to refinance the existing debt of General Cable and its subsidiaries and to finance the fees, commissions, costs and expenses surrounding the acquisition.

This financing consists of two lines of credit:

• "Term Loan": a term loan for Euro 1 billion, repayable on the fifth anniversary of the acquisition closing date (6 June 2023);

• "Bridge Loan": a term loan for Euro 700 million, repayable with a bullet payment within 2 years of the acquisition closing date (8 June 2020).

The interest rates applied to the new loans are indexed to 6M and 3M Euribor.

Both lines were drawn down in full upon acquiring General Cable.

With reference to the Bridge Loan, the Group has made the following early repayments: Euro 200 million in December 2018 and Euro 100 million in March 2019. Following these repayments, at 30 June 2019, the loan has a residual value of Euro 401 million. At 30 June 2019, the fair value of these two loans approximates their carrying amount.

Unicredit Loan

On 15 November 2018, Prysmian S.p.A. entered into an agreement with Unicredit for a medium-term cash loan for a maximum amount of Euro 200 million for 5 years from the date of signing. The agreement envisages a bullet repayment at maturity. The interest rate applied is indexed to 6M and 3M Euribor. As at 30 June 2019, this loan was drawn down in full. At 30 June 2019, the fair value of this loan approximates its carrying amount.

Mediobanca Loan

On 20 February 2019, the Group entered into an agreement with Mediobanca for a Euro 100 million mediumterm loan for 5 years from the date of signing, with a bullet repayment at maturity. The interest rate applied is indexed to 6M and 3M Euribor. As at 30 June 2019, this loan was drawn down in full. At 30 June 2019, the fair value of this loan approximates its carrying amount.

The following table summarises the committed lines available to the Group at 30 June 2019 and 31 December 2018:

30 June 2019
Total lines	Drawn	Undrawn
1,000		1,000
100	(100)	-
143	(143)	-
1,000	(1,000)	-
400	(400)	-
200	(200)	-
100	(100)	-
2,943	(1,943)	1,000

(in millions of Euro)
31 December 2018
	Total lines	Drawn	Undrawn
Syndicated Revolving Credit Facility 2014	1,000	-	1,000
CDP Loan	100	(100)	-
EIB Loans	152	(152)	-
Term Loan	1,000	(1,000)	-
Bridge Loan	500	(500)	-
Unicredit Loan	200	(200)	-
Total	2,952	(1,952)	1,000

Bonds

The Prysmian Group had the following bonds outstanding as at 30 June 2019:

Non-convertible bond issued in 2015

On 10 March 2015, the Board of Directors of Prysmian S.p.A. authorised management to proceed, depending on prevailing market conditions and in any case by 30 June 2016, with the issuance and private or public placement of bonds in one or more tranches. These bonds were offered for sale to institutional investors only. As a result, on 30 March 2015 Prysmian S.p.A. completed the placement with institutional investors of an unrated bond, on the Eurobond market, for a total nominal value of Euro 750 million. The bond, with an issue price of Euro 99.002, has a 7-year maturity and pays a fixed annual coupon of 2.50%. The individual bonds, maturing on 11 April 2022, have minimum denominations of Euro 100,000, plus integral multiples of Euro 1,000.

The bond settlement date was 9 April 2015. The bond has been admitted to the Luxembourg Stock Exchange and is traded on the related regulated market.

At 30 June 2019, the fair value of the non-convertible bond is Euro 781 million. Fair value has been determined with reference to the quoted price in the relevant market (Level 1 of the fair value hierarchy).

Convertible Bond 2017

On 12 January 2017, the Board of Directors approved the placement of an equity-linked bond, known as "Prysmian S.p.A. Euro 500 million Zero Coupon Equity Linked Bonds due 2022" maturing 17 January 2022 and reserved for institutional investors.

At the meeting held on 12 April 2017, the Company's shareholders authorised:

the convertibility of the Equity-Linked Bond;
the proposal to increase share capital for cash, in single or multiple issues with the exclusion of preemptive rights, by a maximum nominal amount of Euro 1,457,942.70, by issuing, in single or multiple instalments, up to 14,579,427 ordinary shares of the Company, with the same characteristics as its other outstanding ordinary shares, exclusively and irrevocably to serve the Bond's conversion.

The conversion price of the bonds of Euro 34.2949 was set by applying a 41.25% premium to the weighted average price of the Company's ordinary shares recorded on the Milan Stock Exchange between the start and end of the book-building process during the morning of 12 January 2017.

The Company will have the option to call all (but not just a part) of the outstanding bonds at their principal amount from 1 February 2020, should the value of the shares exceed 130% of the conversion price for a specified period of time.

The placement has allowed the Company to diversify its financial resources more widely by raising funds on the capital market. These funds will be used to pursue the Company's potential external growth opportunities; to finance, in line with the shareholders' authorisation of the share buyback, the buyback of the Company's shares that will be used to fulfil potential conversion rights requirements and/or as consideration to finance the Company's growth strategy and for general corporate purposes.

On 16 May 2017, the Company sent a physical settlement notice to holders of the bonds, granting them the right, with effect from 29 May 2017, to convert them into the Company's existing or new ordinary shares. On 30 May 2017, the Bond was admitted to trading on the Third Market (a multilateral trading facility or MTF) on the Vienna Stock Exchange.

The accounting treatment for the Convertible Bond 2017 has resulted in the recognition of an equity component of Euro 48 million and a debt component of Euro 452 million, determined at the bond issue date.

(in millions of Euro)
Issue value of convertible bond	500
Equity reserve for convertible bond	(48)
Issue date net balance	452
Interest - non-monetary	24
Related costs	(4)
Balance at 30 June 2019	472

At 30 June 2019, the fair value of the Convertible Bond 2017 (equity component and debt component) is Euro 484 million, of which the fair value of the debt component is Euro 473 million. In the absence of trading on the relevant market, fair value has been determined using valuation techniques that refer to observable market data (Level 2 of the fair value hierarchy).

General Cable convertible bond

This bond, originating from the acquisition of General Cable, was issued on 18 December 2009 for an amount of USD 429.5 million; it allowed bondholders the option, in the event of an acquisition, to request repayment of the nominal value plus a premium. The Bond was almost entirely extinguished in the two months following the acquisition, leaving a remaining debt of USD 0.4 million at 30 June 2019.

Other borrowings from banks and other lenders and Finance lease obligations

The following tables report movements in Borrowings from banks and other lenders:

(in millions of Euro)
	CDP Loan	EIB Loans	Conv. Bonds	Non-Conv. Bonds	Loans for acquisitio n	Unicredit and Mediobanca Loans	Other borrowings / Lease obligations	Total
Balance at 31 December 2018	100	152	467	759	1,494	199	88	3,259
Currency translation differences	-	-	-	-	-	-	(1)	(1)
New funds	-	-	-	-	-	100	24	124
Repayments	-	(9)	-	-	(100)	-	(54)	(163)
Amortisation of bank and financial fees and other expenses	-	-	-	-	2	-	-	2
Application IFRS 16 1st January 2019	-	-	-	-	-	-	159	159
Interest and other movements	-	-	5	(9)	-	-	-	(4)
Total movements	-	(9)	5	(9)	(98)	100	128	117
Balance at 30 June 2019	100	143	472	750	1,396	299	216	3,376

(in millions of Euro)

	CDP Loan	EIB Loans	Conv. Bonds	Non-Conv. Bonds	Loans for acquisition	Unicredit and Mediobanca Loans	Other borrowings (including ex General Cable borrowings) / Finance lease obligations	Total
Balance at 31 December 2017	100	169	739	757	-	-	71	1,836
Business combinations	-	-	396	-	-	-	915	1,311
Currency translation differences	-	-	-	-	-	-	(3)	(3)
New funds	-	-	-	-	1,700	-	33	1,733
Repayments	-	(9)	(313)	-	-	-	(897)	(1,219)
Drawn revolving facility	-	-	-	-	-	-	500	500
Amortisation of bank and financial fees and other expenses	-	-	-	-	-	-	-	-
Conversion of Convertible Bond 2013	-	-	(283)	-	-	-	-	(283)
Interest and other movements	-	-	6	(9)	(8)	-	-	(11)
Total movements	-	(9)	(194)	(9)	1,692	-	548	2,028
Balance at 30 June 2018	100	160	545	748	1,692	-	619	3,864

NET FINANCIAL DEBT

(in millions of Euro)
	Note	30 June 2019	31 December 2018
Long-term financial payables
CDP Loan	10	100	100
EIB Loans	10	126	135
Non-convertible bond	10	746	745
Convertible Bond 2013	10	-	-
Convertible Bond 2017	10	472	467
Term Loan	10	994	993
Bridge Loan	10	-	500
Unicredit Loan	10	199	199
Mediobanca Loan	10	100	-
Revolving Facility	10
Finance leases	10	111	11
Interest rate swaps	5	17	8
Other financial payables	10	12	11
Total long-term financial payables		2,877	3,169
CDP Loan	10	-	-
EIB Loans	10	17	17
Non-convertible bond	10	4	14
Convertible Bond 2013	10	-	-
Convertible Bond 2017	10
Term Loan	10	1	1
Bridge Loan	10	401	-
Unicredit Loan	10	-	-
Mediobanca Loan	10	-	-
Revolving Facility	10	-	-
Finance leases	10	41	1
Interest rate swaps	5	7	6
Forward currency contracts on financial transactions	5	1	2
Other financial payables	10	52	65
Total short-term financial payables		524	106

Total financial liabilities		3,401	3,275
Long-term financial receivables	3	2	2
Long-term bank fees	3	4	-
Financial assets at amortised cost		4	5
Forward currency contracts on financial transactions (non-current)	5	-	-
Interest rate swaps (non-current)	5	-	-
Interest rate swaps (current)	5	-	-
Forward currency contracts on financial transactions (current)	5	2	2
Short-term financial receivables	3	7	7
Short-term bank fees	3	2	1
Financial assets at fair value through profit or loss	6	20	25
Financial assets at fair value through other comprehensive income	-	11	10
Cash and cash equivalents	7	530	1,001
Net financial debt		2,819	2,222

The following table presents a reconciliation of the Group's net financial debt to the amount that must be reported under Consob Communication DEM/6064293 issued on 28 July 2006 and under the CESR recommendation dated 10 February 2005 "Recommendations for the consistent implementation of the European Commission's Regulation on Prospectuses":

Note	30 June 2019	31 December 2018
	2,819	2,222

	6	7
5	4	-

5	5	11
5	6	4

	2,840	2,244

11. TRADE AND OTHER PAYABLES

These are detailed as follows:

(in millions of Euro)
			30 June 2019
	Non-current	Current	Total
Trade payables	-	2,246	2,246
Total trade payables	-	2,246	2,246
Other payables:
Tax and social security payables	3	195	198
Advances from customers	-	331	331
Payables to employees	-	156	156
Accrued expenses	-	149	149
Other	11	109	120
Total other payables	14	940	954
Total	14	3,186	3,200
(in millions of Euro)
		31 December 2018 (*)
	Non-current	Current	Total
Trade payables	-	2,132	2,132
Total trade payables	-	2,132	2,132
Other payables:
Tax and social security payables	3	163	166
Advances from customers	-	332	332
Payables to employees	-	176	176
Accrued expenses	-	140	140
Other	9	142	151
Total other payables	12	953	965
Total	12	3,085	3,097

Trade payables include around Euro 213 million (Euro 218 million at 31 December 2018) for the supply of strategic metals (copper, aluminium and lead), whose payment terms, in some cases, are longer than normal for this type of transaction.

Advances from customers include the liability for construction contracts, amounting to Euro 285 million at 30 June 2019 compared with Euro 292 million at 31 December 2018. This liability represents the excess of amounts invoiced over costs incurred plus accumulated profits (or losses), recognised using the percentage of completion method.

12. PROVISIONS FOR RISKS AND CHARGES

These are detailed as follows:

(in millions of Euro)
			30 June 2019
	Non-current	Current	Total
Restructuring costs	-	24	24
Contractual and legal risks	10	320	330
Environmental risks	-	9	9
Tax risks	22	60	82
Contingent liabilities	3	167	170
Other risks and charges	9	50	59
Total	44	630	674

(in millions of Euro)
31 December 2018 (*)
	Non-current	Current	Total
Restructuring costs	1	38	39
Contractual and legal risks	13	314	327
Environmental risks	2	8	10
Tax risks	22	65	87
Contingent liabilities	3	167	170
Other risks and charges	10	43	53
Total	51	635	686

The following table presents the movements in these provisions during the reporting period:

	Restructuring costs	Contractual and legal risks	Environmental risks	Tax risks	Contingent liabilities	Other risks and charges	Total
Balance at 31 December 2018 (*)	39	327	10	87	170	53	686
Business combinations	-	-	-	-	-	-	-
Increases	5	20	-	-	-	3	28
Utilisations	(15)	(11)	(1)	(3)	-	(2)	(32)
Releases	(6)	(7)	(1)	-	-	(1)	(15)
Currency translation differences	(1)	2	1	2	-	-	4
Other	2	(1)	-	(4)	-	6	3
Total movements	(15)	3	(1)	(5)	-	6	(12)
Balance at 30 June 2019	24	330	9	82	170	59	674

The provision for contractual and legal risks amounts to Euro 330 million at 30 June 2019.

This provision includes the provision for the antitrust investigations discussed in the following paragraphs.

Antitrust - European Commission Proceedings in the high voltage underground and submarine cables business

The European Commission started an investigation in late January 2009 into several European and Asian electrical cable manufacturers to verify the existence of alleged anti-competitive practices in the high voltage underground and submarine cables markets. On 2 April 2014, the European Commission adopted a decision under which it found that, between 18 February 1999 and 28 January 2009, the world's largest cable producers, including Prysmian Cavi e Sistemi S.r.l., adopted anti-competitive practices in the European market for high voltage submarine and underground power cables. The European Commission held Prysmian Cavi e Sistemi S.r.l. jointly liable with Pirelli & C. S.p.A. for the alleged infringement in the period 18 February 1999 - 28 July 2005, sentencing them to pay a fine of Euro 67.3 million, and it held Prysmian Cavi e Sistemi S.r.l. jointly liable with Prysmian S.p.A. and The Goldman Sachs Group Inc. for the alleged infringement in the period 29 July 2005 - 28 January 2009, sentencing them to pay a fine of Euro 37.3 million. Prysmian filed an appeal against this decision with the General Court of the European Union along with an application to intervene in the appeals respectively lodged by Pirelli & C. S.p.A. and The Goldman Sachs Group Inc. against the same decision. Both Pirelli & C. S.p.A. and The Goldman Sachs Group Inc. in turn submitted applications to intervene in the appeal brought by Prysmian against the European Commission's decision. The applications to intervene presented by Prysmian, Pirelli and The Goldman Sachs Group Inc. were accepted by the General Court of the European Union. Prysmian did not incur any financial outlay as a result of this decision having elected, pending the outcome of the appeals, to provide bank guarantees as security against payment of 50% of the fine imposed by the European Commission (amounting to approximately Euro 52 million) for the alleged infringement in both periods. As far as Prysmian is aware, Pirelli & C. S.p.A. also provided the European Commission with a bank guarantee for 50% of the value of the fine imposed for the alleged infringement in the period 18 February 1999 - 28 July 2005. The hearing of oral arguments in the appeal brought by Prysmian against the European Commission's decision of April 2014 took place on 20 March 2017, while the hearings of oral arguments in the appeals brought by Pirelli & C. S.p.A. and The Goldman Sachs Group Inc. against the same decision of the European Commission in April 2014 took place on 22 and 28 March 2017 respectively.

On 12 July 2018, the General Court of the European Union issued rulings on the appeals lodged by the Prysmian Group, including General Cable. These rulings have dismissed the appeals and confirmed the previously imposed fines. The Prysmian Group, including General Cable, does not agree with the conclusions reached by the General Court of the European Union and has appealed to the Court of Justice of the European Union.

Pirelli & C. S.p.A. has brought a civil action against Prysmian Cavi e Sistemi S.r.l. in the Milan Courts, in which it demands to be held harmless for all claims made by the European Commission in implementation of its decision and for any expenses related to such implementation. Prysmian Cavi e Sistemi S.r.l. started legal proceedings in February 2015, requesting that the claims brought by Pirelli & C. S.p.A. be rejected in full and that it should be Pirelli & C. S.p.A. which holds harmless Prysmian Cavi e Sistemi S.r.l., with reference to the alleged infringement in the period 18 February 1999 - 28 July 2005, for all claims made by the European Commission in implementation of its decision and for any expenses related to such implementation. The proceedings have since been stayed by order of the court concerned in April 2015, pending the outcome of the appeals made against the European Commission's decision by both Prysmian and Pirelli in the European Courts. Pirelli has challenged this decision before the Court of Cassation, Italy's highest court of appeal, which has confirmed the stay of execution ordered by the Milan Courts. In view of the circumstances described and also with the support of the Group's legal advisors and consistent with the accounting policies, the Directors have recognised a level of provisions deemed appropriate to cover the potential liabilities associated with the events in question.

Antitrust - Other proceedings in the high voltage underground and submarine cables business in jurisdictions other than the European Union

In Brazil, the local antitrust authority started an investigation into several manufacturers of high voltage underground and submarine cables, amongst whom Prysmian, notified of this investigation in 2011. Prysmian's preliminary defence was rejected by the local competition authority in a statement issued in February 2015. On 3 January 2019, the authority informed Prysmian that the investigative stage had been completed and gave it 10 working days for the submission of briefs, duly filed by Prysmian on 18 January 2019. The general superintendence of the Brazilian antitrust authority (Administrative Council for Economic Defense – "CADE") published a Technical Note in the Brazilian Federal Official Gazette on 11 February 2019. The Technical Note sets out the conclusions of CADE's investigations which favour the imposition of a fine on Prysmian. The Technical Note contains the recommendation that the amount the CADE Tribunal could fine Prysmian be between 15% and 20% of its turnover in Brazil in 2009. In any case, this recommendation is not binding. The CADE Tribunal's decision, which will be issued at the end of a public hearing, will be provisionally enforceable but can be challenged before the Brazilian courts.

The public hearing before the CADE Tribunal was held on 11 June 2019, as a result of which the Tribunal has not made any decision and has postponed discussion of the case to a future hearing without however setting its date.

In view of the circumstances described, the Directors, also assisted by their legal advisors, have already recognised a provision of Euro 68 million in the financial statements at 31 December 2018.

Antitrust - Claims for damages as a result of the European Commission's 2014 decision

During 2015, National Grid and Scottish Power, two British operators, filed claims in the High Court of London against certain cable manufacturers, including Prysmian Group companies, to obtain compensation for damages purportedly suffered as a result of the alleged anti-competitive practices condemned by the European Commission in the decision adopted in April 2014. The Group companies concerned were notified of this initial court filing during the month of May 2015 and presented their defence early in October 2015, along with the summons of other parties censured in the European Commission's decision. Among the parties involved in this action, Pirelli & C. S.p.A. has requested the London High Court to decline its jurisdiction or nonetheless to stay the proceedings in its regard pending the outcome of the civil action previously brought by Pirelli against Prysmian Cavi e Sistemi S.r.l. in the Milan Courts, in which it demands to be held harmless for all claims made by the European Commission in implementation of the latter's decision and for any expenses related to such implementation. The proceedings have since been stayed, as agreed between the parties, pending the outcome of the action brought by Pirelli in the Milan Courts. A similar agreement has also been reached with The Goldman Sachs Group Inc., another company involved in the actions discussed above. The other actions brought by Prysmian Group companies against other cable manufacturers censured in the European Commission decision have in turn been stayed pending the outcome of the main action brought by National

Grid and Scottish Power. The main judgement is still in progress and a date has recently been set for the court case to begin in November 2020.

During the first few months of 2017, in addition to those mentioned in the preceding paragraph, other operators belonging to the Vattenfall Group filed claims in the High Court of London against certain cable manufacturers, including companies in the Prysmian Group, to obtain compensation for damages purportedly suffered as a result of the alleged anti-competitive practices condemned by the European Commission in its decision of April 2014. The Prysmian Group defendant companies duly filed their statement of objections. By an order dated 8 August 2018, the Court dismissed the statements of objection filed, among others, by the defendant Prysmian Group companies, which in turn appealed against this order to the relevant court. In a ruling dated 17 December 2018, the appeal presented by the Prysmian Group companies was dismissed, like for the other defendants. The judgement will now address the merits of the dispute.

Prysmian S.p.A. and Prysmian Cavi e Sistemi S.r.l. have been summoned by Nexans France SAS and Nexans SA to appear before the Court of Dortmund (Germany) in notifications dated 24 and 25 May 2018 respectively. The plaintiffs have asked the Court concerned to ascertain the existence of joint and several liability between Prysmian S.p.A. and Prysmian Cavi e Sistemi S.r.l., on the one hand, and Nexans France SAS and Nexans SA, on the other, for any damages suffered by third parties in Germany as a result of the alleged cartel in the market for high voltage underground and submarine power cables condemned in the European Commission's decision dated 2 April 2014. On 7 June 2018, Prysmian S.p.A. and Prysmian Cavi e Sistemi S.r.l. filed a notice with the Court concerned in which they declared their intention to appear and defend themselves in this action and requested an 8-month deadline within which to file their defence, duly granted by the Court.

Prysmian filed its response on 20 February 2019. The Court concerned has issued a stay of execution dated 3 June 2019 pending the outcome of the appeal against the European Commission's decision brought before the European Courts by both Prysmian and Nexans.

At present, Prysmian S.p.A. and Prysmian Cavi e Sistemi S.r.l. have not yet been able to assess in detail the merits of this litigation, except to express their intention to defend themselves.

On 2 April 2019, a writ of summons was served, on behalf of Terna S.p.A., on certain cable manufacturers, including companies in the Prysmian Group, claiming compensation for damages purportedly suffered as a result of the alleged anti-competitive practices condemned by the European Commission in its April 2014 decision. This action has been brought before the Court of Milan.

In view of the circumstances described and also with the support of their legal advisors, the Directors have recognised a level of provisions deemed appropriate to cover the potential liabilities associated with the events in question.

On 22 March 2019, National Grid communicated that it had brought a new action in the High Court of London against certain Group companies in which it claims compensation for damages purportedly suffered through alleged anti-competitive practices employed over a period running from the 1970s until 1997. On 12 June 2019, a writ of summons was served in which National Grid further detailed its claim for damages, which it also quantified. In view of the preliminary status of the litigation and the uncertainty surrounding the grounds of the plaintiff's claim, the Directors, also assisted by their legal advisors, have not considered it necessary to recognise any provision.

In addition, on 4 April 2019, the Group learned that the following legal actions had been brought in the Court of London:

action by Scottish and Southern Energy (SSE) Group companies against certain cable manufacturers, including companies in the Prysmian Group. The action concerns a claim for compensation for damages purportedly suffered as a result of the alleged anti-competitive practices condemned by the European Commission in its April 2014 decision and refers to a series of unidentified underground and submarine projects. The damages for which compensation is claimed have not been quantified;
action by Greater Gabbard Offshore Winds Limited and SSE companies against certain Group companies. This action also concerns a claim for compensation for damages purportedly suffered as a result of the alleged anti-competitive practices condemned by the European Commission in its April 2014 decision and specifically refers to the Greater Gabbard wind farm project in the United Kingdom. The damages for which compensation is claimed have not been quantified.

On 2 April 2019, certain Group companies received a letter sent on behalf of Tennet TSO BV claiming compensation for damages purportedly suffered as a result of the alleged anti-competitive practices condemned by the European Commission in its April 2014 decision. However, the letter does not include any quantification of the damages and explicitly states that its purpose, among others, is to avoid expiry of the statute of limitations.

Even though a negative outcome is considered likely, the Directors have been unable to estimate the amount to provide against this and the other actions listed above because the plaintiffs have not quantified their claims.

Lastly, on 2 April 2019, a writ of summons was served, on behalf of Electricity & Water Authority of Bahrain, GCC Interconnection Authority, Kuwait Ministry of Electricity and Water and Oman Electricity Transmission Company, on certain cable manufacturers, including companies in the Prysmian Group, on Pirelli & C. S.p.A. and The Goldman Sachs Group Inc. This action has been brought in the Court of Amsterdam and also involves a claim for compensation for damages purportedly suffered as a result of the alleged anti-competitive practices condemned by the European Commission in its April 2014 decision. The writ does not contain any quantification of the damages. Based on the information currently available, the Directors are of the opinion not to make any provision.

Antitrust - Other investigations

At the end of February 2016, the Spanish antitrust authorities initiated proceedings to verify the existence of anti-competitive practices by local low voltage cable manufacturers and distributors, including the Group's local subsidiaries. The Spanish competition authority then sent a statement of objections to some of the Group's local subsidiaries in January 2017.

On 24 November 2017, the local competition authority notified the Group's Spanish subsidiaries of a decision under which they were held liable for the alleged infringements in the period from June 2002 to June 2015 and were jointly and severally sentenced to pay a fine of Euro 15.6 million. The Group's Spanish subsidiaries have appealed against this decision. The appeal decision is still pending.

The decision of 24 November 2017 also held the Spanish subsidiaries of General Cable liable for breach of local antitrust law. However, they have obtained immunity from paying the related fine (quantified at about Euro 12.6 million) having filed for leniency and collaborated with the local competition authority in its investigations. The Spanish subsidiaries of General Cable have also appealed against the decision of the local competition authority; the appeal decision is still pending.

In view of the circumstances described and also with the support of the Group's legal advisors and consistent with the accounting policies, the Directors have adjusted the related provisions for risks deemed appropriate to cover the potential liabilities associated with the events in question.

As at 30 June 2019, the provision for the above antitrust matters amounts to approximately Euro 260 million. Despite the uncertainty of the outcome of the investigations and legal action in progress, the amount of this provision is considered to represent the best estimate of the liability based on the information now available.

13. EMPLOYEE BENEFIT OBLIGATIONS

These are detailed as follows:

(in millions of Euro)
	30 June 2019	31 December 2018
Pension plans	440	379
Employee indemnity liability (Italian TFR)	18	15
Medical benefit plans	34	30
Termination and other benefits	36	39
Total	528	463

Movements in employee benefit obligations have had an overall impact of Euro 13 million on the period's income statement, of which Euro 7 million classified in personnel costs and Euro 6 million in finance costs.

The period average headcount and period-end closing headcount are shown below:

1st half 2019	1st half 2018 (*)
Average number 29,519	21,293

30 June 2019	31 December 2018
Closing number 29,810	29,159

(*) The period average refers only to employees of the Prysmian Group and its structure prior to the acquisition of General Cable.

14. OPERATING INCOME

Operating income is a profit of Euro 335 million in the first six months of 2019 (compared with a profit of Euro 158 million in the first six months of 2018) and is stated after the following adjustments:

(in millions of Euro)
	1st half 2019	1st half 2018
Company reorganisation (1)	(7)	(14)
of which General Cable integration costs	1	(5)
Non-recurring (expenses)/income(2)	(6)	-
of which Antitrust	(6)	-
Other non-operating (expenses)/income (3)	(16)	(32)
of which General Cable acquisition-related costs	-	(4)
of which General Cable integration costs	(2)	(18)
of which release of General Cable inventory step-up	-	(5)
Total adjustments	(29)	(46)

(1) Income and expense for company reorganisation: these refer to income and expense that arise as a result of the closure of production facilities and/or as a result of projects to enhance the organisational structure's efficiency;

(2) Non-recurring income and expense: these refer to income and expense related to unusual events that have not affected the income statement in past periods and that will probably not affect the results in future periods;

(3) Other non-operating income and expense: these refer to income and expense that management considers should not be taken into account when measuring business performance.

15. FINANCE COSTS AND INCOME

Finance costs are detailed as follows:

(in millions of Euro)
1st half 2019	1st half 2018
Interest on loans -	3
Interest on Term Loan 6
Interest on Bridge Loan 2	-
Interest on Unicredit Loan 1	-
Interest on non-convertible bond 9	9
Interest on convertible bond 2013 - non-monetary component -	1
Interest on convertible bond 2017 - non-monetary component 5	5
Interest Rate Swaps 3	-
Interest on finance leases 2	-
Amortisation of bank and financial fees and other expenses 4	3
Employee benefit interest costs net of interest on plan assets 6	5
Other bank interest 5	3
Costs for undrawn credit lines 3	2
Sundry bank fees 7	7
Non-recurring other finance costs 1	1
Finance costs for hyperinflation 7	-
Other 5	2
Finance costs 66	41
Foreign currency exchange losses 143	176
Total finance costs 209	217

Finance income is detailed as follows:

(in millions of Euro)
	1st half 2019	1st half 2018
Interest income from banks and other financial institutions	2	2
Other finance income	7	2
Finance income	9	4
Net gains on forward currency contracts	5	8
Gains on derivatives	5	8
Foreign currency exchange gains	123	159
Total finance income	137	171

16. TAXES

Taxes have been estimated on the basis of the expected average tax rate for the full year. The tax charge for the first six months of 2019 is Euro 71 million, while the tax rate is 27%.

17. EARNINGS/(LOSS) PER SHARE

Both basic and diluted earnings (loss) per share have been calculated by dividing the net result for the period attributable to owners of the parent by the average number of the Company's outstanding shares.

Diluted earnings/(loss) per share have been affected by the options under the employee share purchase plan (YES Plan). Diluted earnings/(loss) per share have not been affected by the Convertible Bond 2017, whose conversion is currently "out of the money", or by the options under the long-term incentive plan 2018-2020 which, based on the amount of aggregate EBITDA to 30 June 2019, are not yet vested.

(in millions of Euro)
	1st half 2019	1st half 2018 (*)
Net profit/(loss) attributable to owners of the parent	190	80
Weighted average number of ordinary shares (thousands)	263,059	226,902
Basic earnings per share (in Euro)	0.72	0.35
Net profit/(loss) attributable to owners of the parent for purposes of diluted earnings per share	190	80
Weighted average number of ordinary shares (thousands)	263,059	226,902
Adjustments for:
Dilution from incremental shares arising from exercise of stock options (thousands)	5	53
Weighted average number of ordinary shares to calculate diluted earnings per share (thousands)	263,063	226,955
Diluted earnings per share (in Euro)	0.72	0.35

18. CONTINGENT LIABILITIES

As a global operator, the Group is exposed to legal risks primarily, by way of example, in the areas of product liability and environmental, antitrust and tax rules and regulations. The outcome of legal disputes and proceedings currently in progress cannot be predicted with certainty. An adverse outcome in one or more of these proceedings could result in the payment of costs that are not covered, or not fully covered, by insurance, which would therefore have a direct effect on the Group's financial position and results.

As at 30 June 2019, the contingent liabilities for which the Group has not recognised any provision for risks and charges, on the grounds that an outflow of resources is unlikely, but which can nonetheless be estimated reliably, amount to approximately Euro 132 million.

19. RECEIVABLES FACTORING

With reference to factoring programmes, the Group has made use of without-recourse factoring of trade receivables. The amount of receivables factored but not yet paid by customers was Euro 326 million at 30 June 2019 (Euro 336 million at 31 December 2018).

20. SEASONALITY

The Group's business features a certain degree of seasonality in its revenues, which are usually higher in the second and third quarters. This is due to the fact that utilities projects in the northern hemisphere are mostly concentrated in the warmer months of the year. The Group's level of debt is generally higher in the period May-September, with funds being absorbed by the growth in working capital.

21. RELATED PARTY TRANSACTIONS

Transactions between Prysmian S.p.A. and subsidiaries with associates mainly refer to:

trade relations involving purchases and sales of raw materials and finished goods;
services (technical, organisational and general) provided by head office for the benefit of Group companies;
recharge of royalties for the use of trademarks, patents and technological know-how by Group companies.

All the above transactions form part of the Group's continuing operations.

The following tables provide a summary of the related party transactions during the six months ended 30 June 2019:

(in millions of Euro)
					30 June 2019
	Equity-accounted companies	Compensation of directors, statutory auditors and key management personnel	Total related parties	Total reported amount	Related party % of total
Equity-accounted investments	307	-	307	307	100.0%
Trade receivables	5	-	5	1,898	0.3%
Other receivables	2	-	2	954	0.2%
Trade payables	2	-	2	2,246	0.1%
Other payables	-	2	2	954	0.2%
Provisions for risks and charges		4	4	674	0.6%

(in millions of Euro)

					31 December 2018 (*)
	Equity-accounted companies	Compensation of directors, statutory auditors and key management personnel	Total related parties	Total reported amount	Related party % of total
Equity-accounted investments	294	-	294	294	100.0%
Trade receivables	3	-	3	1,635	0.2%
Other receivables	5	-	5	700	0.7%
Trade payables	5	-	5	2,132	0.2%
Other payables	-	1	1	965	0.1%
Provisions for risks and charges		4	4	686	0.6%

(in millions of Euro)

					1st half 2019
	Equity-accounted companies	Compensation of directors, statutory auditors and key management personnel	Total related parties	Total reported amount	Related party % of total
Sales of goods and services	15	-	15	5,849	0.3%
Other income	2	-	2	24	8.3%
Raw materials. consumables used and goods for resale	(6)	-	(6)	(3,730)	0.2%
Personnel costs	-	(5)	(5)	(745)	0.7%
Other expenses	-	-	-	(1,017)	0.0%
Share of net profit/(loss) of equity-accounted companies	13	-	13	13	100.0%

		(in millions of Euro)

					1st half 2018 (*)
	Equity-accounted	Compensation	Total	Total	Related
	companies	of directors, statutory auditors and key management personnel	related parties	reported amount	party % of total
Sales of goods and services	17	-	17	4,364	0.4%
Other income	2	-	2	47	4.3%
Raw materials. consumables used and goods for resale	(9)	-	(9)	(2,903)	0.3%
Personnel costs	-	(9)	(9)	(564)	1.6%
Other expenses	-	-	-	(771)	0.0%
Share of net profit/(loss) of equity-accounted companies	36	-	36	36	100.0%

Transactions with associates

Trade and other payables refer to goods and services provided in the ordinary course of the Group's business. Trade and other receivables refer to transactions carried out in the ordinary course of the Group's business.

Compensation of Directors, Statutory Auditors and Key Management Personnel

The compensation of the Directors, Statutory Auditors and Key Management Personnel totals Euro 5 million at 30 June 2019 (Euro 9 million in the first six months of 2018).

22. ATYPICAL AND/OR UNUSUAL TRANSACTIONS

In accordance with the disclosures required by Consob Communication DEM/6064293 dated 28 July 2006, it is reported that no atypical and/or unusual transactions were carried out during the first six months of 2019.

23. COMMITMENTS

Contractual commitments, already given to third parties at 30 June 2019 and not yet reflected in the financial statements, amount to Euro 273 million for property, plant and equipment and Euro 11 million for intangible assets.

As at 30 June 2019, there are no outstanding loans or guarantees by the Parent Company or its subsidiaries to any of the directors, senior managers or statutory auditors.

24. DIVIDEND DISTRIBUTION

On 5 April 2019, the shareholders of Prysmian S.p.A. approved the financial statements for 2018 and the distribution of a gross dividend of Euro 0.43 per share, for a total of some Euro 113 million. The dividend was paid out from 26 June 2019 to shares outstanding on the record date of 25 June 2019, with the shares going ex-dividend on 24 June 2019.

25. GROUP FINANCIAL COVENANTS

The principal credit agreements in place at 30 June 2019, details of which are presented in Note 10. Borrowings from banks and other lenders, require the Group to comply with a series of covenants on a consolidated basis. The main covenants, classified by type, are listed below:

a) Financial covenants

• Ratio between EBITDA and Net finance costs (as defined in the relevant agreements);

• Ratio between Net Financial Debt and EBITDA (as defined in the relevant agreements).

The covenants contained in the relevant credit agreements are as follows:

EBITDA/Net finance costs(1) not	Net financial debt / EBITDA(1) not
less than:	more than
4.00x	3.00x

(1) The ratios are calculated on the basis of the definitions contained in the relevant credit agreements.

b) Non-financial covenants

A number of non-financial covenants have been established in line with market practice applying to transactions of a similar nature and size. These covenants involve a series of restrictions on the grant of secured guarantees to third parties, on the conduct of acquisitions or equity transactions, and on amendments to the Company's by-laws.

Default events

The main default events are as follows:

default on loan repayment obligations;
breach of financial covenants;
breach of some of the non-financial covenants;
declaration of bankruptcy or subjection of Group companies to other insolvency proceedings;
issuance of particularly significant judicial rulings;

• occurrence of events that may adversely and significantly affect the business, the assets or the financial conditions of the Group.

Should a default event occur, the lenders are entitled to demand full or partial repayment of the amounts lent and not yet repaid, together with interest and any other amount due. No collateral security is required.

Actual financial ratios reported at period end, calculated at a consolidated level for the Prysmian Group, are as follows:

	30 June 2019	31 December 2018
EBITDA / Net finance costs (1)	15.02x	10.08x
Net financial debt / EBITDA (1)	2.88x	2.57x

(1) The ratios are calculated on the basis of the definitions contained in the relevant credit agreements.

The above financial ratios comply with both covenants contained in the relevant credit agreements and there are no instances of non-compliance with the financial and non-financial covenants indicated above.

26. EXCHANGE RATES

The main exchange rates used to translate financial statements in foreign currencies for consolidation purposes are reported below:

		Closing rates at	Average rates in












































Saudi Riyal	4.268	4.294	4.237	4.539

(*) The consolidation of General Cable has used, as the average exchange rate for the first half of 2018, the following average rates for the month of June 2018:

Peruvian Sol/Euro: 3.820;
Brazilian Real/Euro: 4.405;
Chilean Peso/Euro: 742;
Colombian Peso/Euro: 3,377;
Mexican Peso/Euro: 23.713;
Norwegian Krone: 9.474;
US Dollar/Euro: 1.168.

(*)

27. SUBSEQUENT EVENTS

Contract for Viking Link project

Contract for inter-array cables for offshore wind farms in the Netherlands

The cables, which will be manufactured at the Prysmian centre of excellence in Nordenham (Germany), are due to be delivered in 2022.

***********

Milan, 1 August 2019

ON BEHALF OF THE BOARD OF DIRECTORS THE CHAIRMAN Claudio De Conto

SCOPE OF CONSOLIDATION – APPENDIX A

The following companies have been consolidated line-by-line:

Fully consolidated subsidiaries on a line-by-line basis:
Legal name	Office	Currency	Share capital	% ownership	Direct parent company
Europe
Austria
Prysmian OEKW GmbH	Wien	Euro	2,053,007.56	100.00%	Prysmian Cavi e Sistemi S.r.I.
Belgium
Draka Belgium N.V.	Antwerpen	Euro	61,973.38	98.52%	Draka Holding B.V.
				1.48%	Draka Kabel B.V.
Denmark
Prysmian Group Denmark A/S	Albertslund	Danish Krone	40,001,000	100.00%	Draka Holding B.V.
Estonia
Prysmian Group Baltics AS	Keila	Euro	1.664.000	100.00%	Prysmian Group Finland OY
Finland
Prysmian Group Finland OY	Kirkkonummi	Euro	100.000	77.7972% 19.9301%	Prysmian Cavi e Sistemi S.r.I.
				2.2727%	Draka Holding B.V. Draka Comteq B.V.
France
Prysmian (French) Holdings S.A.S.	Paron	Euro	129,026,210	100.00%	Prysmian Cavi e Sistemi S.r.I.
Prysmian Cables et Systèmes France S.A.S.	Sens	Euro	136,800,000	100.00%	Prysmian (French) Holdings S.A.S
Draka Comteq France S.A.S.	Paron	Euro	246,554,316	100.00%	Draka France S.A.S.
Draka Fileca S.A.S.	Sainte Geneviève	Euro	5.439.700	100.00%	Draka France S.A.S.
Draka Paricable S.A.S.	Sainte Geneviève	Euro	5,177,985	100.00%	Draka France S.A.S
Draka France S.A.S.	Marne La Vallée	Euro		100.00%
			261.551.700		Draka Holding B.V.
P.O.R. S.A.S.	Marne La Vallée	Euro	100.000	100.00%	Draka France S.A.S.
Silec Cable, S. A. S.	Montreau-Fault-Yonne	Euro	60,037,000	100.00%	Grupo General Cable Sistemas, S.L.
Germany
Prysmian Kabel und Systeme GmbH	Berlin	Euro	15,000,000	93.75%	Draka Deutschland GmbH
				6.25%	Prysmian S.p.A.
Prysmian Unterstuetzungseinrichtung Lynen GmbH	Eschweiler	Deutsche Mark	50.000	100.00%	Prysmian Kabel und Systeme GmbH
Draka Comteq Berlin GmbH & Co.KG	Berlin	Deutsche Mark	46,000,000	50.10%	Prysmian Netherlands B.V.
		Euro	1	49.90%	Draka Deutschland GmbH
Draka Comteq Germany Verwaltungs GmbH	Koln	Euro	25.000	100.00%	Draka Comteq B.V.
Draka Comteq Germany GmbH & Co.KG	Koln	Euro	5,000,000	100.00%	Draka Comteq B.V.
Draka Deutschland Erste Beteiligungs- GmbH	Wuppertal	Euro	25.000	100.00%	Draka Holding B.V.
Draka Deutschland GmbH	Wuppertal	Euro	25,000	90.00%	Draka Deutschland Erste Beteiligungs GmbH
				10.00%	Draka Deutschland Zweite Beteiligungs GmbH
Draka Deutschland Verwaltungs GmbH	Wuppertal	Deutsche Mark	50.000	100.00%	Prysmian Kabel und Systeme GmbH
Draka Deutschland Zweite Beteiligungs GmbH	Wuppertal	Euro	25,000	100.00%	Prysmian Netherlands B.V.
Draka Service GmbH	Nuremberg	Euro	25,000	100.00%	Draka Cable Wuppertal GmbH
Höhn GmbH	Wuppertal	Deutsche Mark	1.000.000	100.00%	Draka Deutschland GmbH
Kaiser Kabel GmbH	Wuppertal	Deutsche Mark	9,000,000	100.00%	Draka Deutschland GmbH
NKF Holding (Deutschland) GmbH i.L.		Euro	25.000	100.00%	Prysmian Netherlands B.V.
	Wuppertal
Norddeutsche Seekabelwerke GmbH	Nordenham	Euro	50,025,000	100.00%	Grupo General Cable Sistemas, S.L.

Legal name	Office	Currency	Share capital	% ownership	Direct parent company
u.K.
Prysmian Cables & Systems Ltd.	Eastleigh	British Pound	113,901,120	100.00%	Prysmian UK Group Ltd.
Prysmian Construction Company Ltd.	Eastleigh	British Pound	1	100.00%	Prysmian Cables & Systems Ltd.
Prysmian Cables (2000) Ltd.	Eastleigh	British Pound	1	100.00%	Prysmian Cables & Systems Ltd
Prysmian Cables and Systems International Ltd.	Eastleigh	Euro		100.00%	Prysmian Cavi e Sistemi S.r.I.
Cable Makers Properties & Services Limited	Esher	British Pound	39.08	75.00%	Prysmian Cables & Systems Ltd.
				25.00%	Third parties
Comergy Ltd.	Eastleigh	British Pound		100.00%	Prysmian Cavi e Sistemi S.r.I.
Prysmian Pension Scheme Trustee Limited	Eastleigh	British Pound	1	100.00%	Prysmian S.p.A.
Prysmian UK Group Ltd.	Eastleigh	British Pound	70,011,000	100.00%	Draka Holding B.V.
Draka Distribution Aberdeen Limited	Eastleigh	British Pound	1	100.00%	Prysmian UK Group Ltd
Draka Comteq UK Ltd.	Eastleigh	British Pound	14,000,002	100.00%	Prysmian UK Group Ltd
Draka UK Ltd.	Eastleigh	British Pound	1	100.00%	Prysmian UK Group Ltd.
Draka UK Group Ltd.	Eastleigh	British Pound	2	100.00%	Prysmian UK Group Ltd.
Prysmian Powerlink Services Ltd.	Eastleigh	British Pound	46,000,100	100.00%	Prysmian UK Group Ltd.
General Cable Holdings (UK) Limited	London	British Pound	20,232,054	100.00%	GK Technologies, Incorporated
General Cable Services Europe Limited	London	British Pound	1,178,495	100.00%	General Cable Holdings (UK) Limited
NSW Technology Limited	Aberdeen	British Pound	10.000	100.00%	Norddeutsche Seekabelwerke GmbH
reland
Prysmian Re Company Designated Activity Company	Dublin	Euro	20,000,000	100.00%	Draka Holding B.V.
Italy
Prysmian Cavi e Sistemi S.r.I.	Milan	Euro	50,000,000	100.00%	Prysmian S.p.A.
Prysmian Cavi e Sistemi Italia S.r.I.	Milan	Euro	77,143,249	100.00%	Prysmian S.p.A.
Prysmian Treasury S.r.l.	Milan	Euro	80,000,000	100.00%	Prysmian S.p.A.
Prysmian PowerLink S.r.I.	Milan	Euro	100,000,000	100.00%	Prysmian S.p.A.
Fibre Ottiche Sud - F.O.S. S.r.I.	Battipaglia	Euro	47,700,000	100.00%	Prysmian S.p.A.
Prysmian Electronics S.r.l.	Milan	Euro	10.000	100.00%	Prysmian Cavi e Sistemi S.r.I.
General Cable Italia S.r.I.	Milan	Euro	10.000	100.00%	Grupo General Cable Sistemas, S.L.
Norway
Prysmian Group Norge AS	Drammen	Norwegian Krone	22,500,000	100.00%	Draka Holding B.V.
General Cable Nordic A/S	Vestby	Norwegian Krone	1,674,000	100.00%	Grupo General Cable Sistemas, S.L.
The Netherlands
Draka Comteq B.V.	Amsterdam	Euro	1,000,000	100.00%	Draka Holding B.V.
Draka Comteq Fibre B.V.	Eindhoven	Euro	18.000	100.00%	Prysmian Netherlands Holding B.V.
Draka Holding B.V.	Amsterdam	Euro	52,229,320,50	100.000%	Prysmian S.p.A.
Draka Kabel B.V.	Amsterdam	Euro	2,277,976.68	100.00%	Prysmian Netherlands B.V.
Donne Draad B.V.	Nieuw Bergen	Euro	28,134.37	100.00%	Prysmian Netherlands B.V.
NKF Vastgoed I B.V.	Delft	Euro	18.151.21	99.00%	Draka Holding B.V.
				1.00%	Prysmian Netherlands B.V.
NKF Vastgoed III B.V.	Delft	Euro	18.151.21	99.00%	Draka Deutschland GmbH
				1.00%	Prysmian Netherlands B.V.
Prysmian Netherlands B.V.	Delft	Euro	1	100.00%	Prysmian Netherlands Holding B.V.
Prysmian Netherlands Holding B.V.	Amsterdam	Euro		100.00%	Draka Holding B.V.

General Cable Holdings Netherlands C.V.	Amsterdam	Euro	159,319,137	95.50%	GK Technologies, Incorporated
				1.00%	GC Global Holdings, Inc.
				3.50%	Phelps Dodge National Cables Corporation

Legal name	Office	Currency	Share capital	% ownership	Direct parent company
Portugal
General Cable Investments, SGPS, Sociedade Unipessoal, S.A.	Funchal	Euro	8,500,020	100.00%	GK Technologies, Incorporated
General Cable Celcat, Energia e Telecomunicaçoes SA	Pero Pinheiro	Euro	13,500,000	100.00%	General Cable Investments, SGPS, Sociedade Unipessoal, S.A
Czech Republic
Draka Kabely, s.r.o.	Velké Meziříčí	Czech Koruna	255,000,000	100.00%	Draka Holding B.V.
Romania
Prysmian Cabluri Si Sisteme S.A.	Slatina	Romanian Leu	103,850,920	99.9995%	Draka Holding B.V.
				0.0005%	Prysmian Cavi e Sistemi S.r.I.
Russia
Limited Liability Company Prysmian RUS	Rybinsk city	Russian Rouble	230,000,000	99.00%	Draka Holding B.V.
				1.00%	Prysmian Cavi e Sistemi S.r.I
Limited Liability Company "Rybinskelektrokabel"	Rybinsk city	Russian Rouble	90,312,000	100.00%	Limited Liability Company Prysmian RUS
Slovakia
Prysmian Kablo s.r.o.	Bratislava	Euro	21,246,001	99.995%	Prysmian Cavi e Sistemi S.r.I.
				0.005%	Prysmian S.p.A.
Spain
Prysmian Cables Spain, S.A. (Sociedad Unipersonal)	Vilanova I la Geltrù	Euro	58.178.234.22	100.00%	Draka Holding , S.L.
Marmavil. S.L. (Sociedad Unipersonal)	Santa Perpetua de Mogoda	Euro	3.006	100.00%	Draka Holding B.V.
Draka Holding ,S.L.	Santa Perpetua de Mogoda	Euro	24,000,000	99.99999%	Draka Holding B.V.
				0.00001%	Marmavil. S.L. (Sociedad Unipersonal)
GC Latin America Holdings, S.L.	Barcelona	Euro	151,042,030	100%	General Cable Holdings (Spain), S.L.
General Cable Holdings (Spain), S.L.	Barcelona	Euro	138,304,698.48	99.349%	GK Technologies, Incorporated
				0.6510%	General Cable Overseas Holdings, LLC
Grupo General Cable Sistemas, S.L.	Barcelona	Euro	22,116,018.7	93.75%	General Cable Holdings (Spain), S.L.
				6.25%	GC Latin America Holdings, S.L.
Sweden
Prysmian Group North Europe AB	Nässjö	Swedish Krona	100,100	100.00%	Draka Holding B.V.
Prysmian Group Sverige AB	Nässjö	Swedish Krona	100,000	100.00%	Prysmian Group North Europe AB
lurkey
Turk Prysmian Kablo Ve Sistemleri A.S.	Mudanya	Turkish new Lira	141,733,652	83.746% 0.705%	Draka Holding B.V. Turk Prysmian Kablo Ve Sistemleri A.S.
				15.549%	Third parties
Tasfiye Halinde Draka Comteq Kablo Limited Sirketi	Osmangazi-Bursa	Turkish new Lira	45,818,775	99.99995%	Draka Comteq B.V.
				0.00005%	Prysmian Netherlands B.V.
Hungary
Prysmian MKM Magyar Kabel Muvek Kft.	Budapest	Hungarian Forint	5,000,000,000	100.00%	Prysmian Cavi e Sistemi S.r.I.

Legal name	Office	Currency	Share capital	% ownership	Direct parent company
North America
Canada
Prysmian Cables and Systems Canada Ltd.	Saint John	Canadian Dollar	1,000,000	100.00%	Draka Holding B.V.
Draka Elevator Products, Incorporated	Saint John	Canadian Dollar	n/a	100.00%	Prysmian Cables and Systems USA, LLC
General Cable Company Ltd.	Brampton	Canadian Dollar	116,417,967	100.00%	General Cable Canada Holdings LLC
Cayman Islands
YA Holdings, Ltd.	George Town	US Dollar	50.000	100.00%	General Cable Company Ltd.
Dominican Republic
General Cable Caribbean, S.R.L	Santa Domingo Oeste	Dominican Peso	2,100,000	99.995%	GK Technologies, Incorporated
				0.005%	Diversified Contractors, Inc.
Trinidad and Tobago
General Cable Trinidad Limited	Port of Spain	Trinidadian Dollar	100	100.00%	GK Technologies, Incorporated
U.S.A.
Prysmian Cables and Systems (US) Inc.	Las Vegas	US Dollar	330.517.608	100.00%	Draka Holding B.V.
Prysmian Cables and Systems USA, LLC	Wilmington	US Dollar	10	100.00%	Prysmian Cables and Systems (US) Inc.
Prysmian Construction Services Inc.	Wilmington	US Dollar	1.000	100.00%	Prysmian Cables and Systems USA, LLC
Draka Elevator Products, Inc.	Boston	US Dollar		100.00%	Prysmian Cables and Systems USA, LLC
Draka Transport USA, LLC	Boston	US Dollar	0	100.00%	Prysmian Cables and Systems USA, LLC
Diversified Contractors, Inc.	Highland Heights	US Dollar	1.000	100.00%	General Cable Industries, Inc.
GC Global Holdings, Inc.	Highland Heights	US Dollar	1.000	100.00%	General Cable Overseas Holdings, LLC
General Cable Canada Holdings LLC	Highland Heights	US Dollar	0	100.00%	General Cable Industries, Inc.
General Cable Corporation	Highland Heights	US Dollar		100.00%	Prysmian Cables and Systems (US) Inc.
General Cable Industries LLC	Highland Heights	US Dollar	0	100.00%	General Cable Industries, Inc.
General Cable Industries, Inc.	Highland Heights	US Dollar	10	100.00%	GK Technologies, Incorporated
General Cable Overseas Holdings, LLC	Highland Heights	US Dollar	0	100.00%	GK Technologies, Incorporated
General Cable Technologies Corporation	Highland Heights	US Dollar	1.000	100.00%	General Cable Industries, Inc.
Phelps Dodge Enfield Corporation	Doral	US Dollar	800,000	100.00%	General Cable Industries, Inc.
Phelps Dodge International Corporation	Doral	US Dollar	100,000	100.00%	General Cable Industries, Inc
Phelps Dodge National Cables Corporation	Doral	US Dollar	10	100.00%	General Cable Industries, Inc
GK Technologies, Incorporated	Highland Heights	US Dollar	1,000	100.00%	General Cable Corporation
Central/South America
Argentina
Prysmian Energia Cables y Sistemas de Argentina S.A.	Buenos Aires	Argentine Peso	992.359.215	40.01%	Prysmian Consultora Conductores e Instalaciones SAIC
				59.74%	Draka Holding B.V.
				0.11%	Prysmian Cabos e Sistemas do Brasil S.A.
Prysmian Consultora Conductores Instalaciones SAIC	Buenos Aires	Argentine Peso	543,219,572	0.13% 95.00%	Third parties Draka Holding B.V.
				5.00%	Prysmian Cavi e Sistemi S.r.I

Legal name Brazil	Office	Currency	Share capital	% ownership	Direct parent company
Prysmian Cabos e Sistemas do Brasil S.A.	Sorocaba	Brazilian Real	547,630,604.56	91.844%	Prysmian Cavi e Sistemi S.r.l.
				0.040%	Prysmian S.p.A.
				1.687%	Draka Holding B.V.
				6.428%	Draka Comteq B.V.
Draka Comteq Cabos Brasil S.A	Santa Catarina	Brazilian Real	27.467.522	49.352%	Draka Comteq B.V.
				50.648%	Prysmian Cabos e Sistemas do Brasil S.A.
General Cable Brasil Indústria e Comércio de Condutores Elétricos Ltda	Poços de Caldas	Brazilian Real	536,087,471	99.99%	Grupo General Cable Sistemas, S.L.
				0.01%	General Cable Holdings (Spain) S.L.
Chile
Prysmian Cables Chile SpA	Santiago	Chile Peso	1,900,000,000	100.00%	Prysmian Cabos e Sistemas do Brasil S.A.
Cobre Cerrillos S.A.	Cerrillos	US Dollar	74,574,400	99.80%	General Cable Holdings (Spain), S.L.
				0.20%	Third parties
Colombia
PDIC Colombia S.A	Bogota	Colombian Peso	594.064.000	95.00%	Conducen, S.R.L.
				5.00%	Alcap Comercial S.A.
Productora de Cables Procables S.A.S.	Bogota	Colombian Peso	1,902,964,285	99.96%	GC Latin America Holdings, S.L.
				0.04%	GK Technologies, Incorporated
Costa Rica
Conducen. S.R.L	Heredia	Costa Rican Color	1,845,117,800	73.52% 26.48%	GC Latin America Holdings, SL Cahosa S.A.
Ecuador
Cables Electricos Ecuatorianos C.A. CABLEC	Quito	US Dollar	243.957	67.14%	General Cable Holdings (Spain), S.L.
				32.86%
El Salvador					Third parties
Conducen Phelps Dodge Centroamerica-El Salvador, S.A. de C.V.	Antiguo Cuscatlan (La Libertad)	US Dollar	22,858	99.95%	Conducen, S.R.L
				0.05%	Third parties
Guatemala
Proveedora de Cables y Alambres PDCA Guatemala, S.A.	Guatemala City	Guatemalan Quetzal	100.000	99.00%	Conducen, S.R.L.
				1.00%
					Third parties
Honduras
Electroconductores de Honduras, S.A. de C.V.	Tegucigalpa	Honduran Lempira	27,600,000	59.39%	General Cable Holdings (Spain), S.L.
Mexico				40.61%	Cahosa S.A.
Draka Durango S. de R.L. de C.V.	Durango	Mexican Peso	163.471.787	99.996%	Draka Mexico Holdings S.A. de C.V.
				0.004%	Draka Holding B.V
Draka Mexico Holdings S.A. de C.V.	Durango	Mexican Peso	57,036,501	99.999998%	Draka Holding B.V
				0.000002%	Draka Comteq B.V.
NK Mexico Holdings S.A. de C.V.	Mexico City	Mexican Peso	n/a	100.00%	Prysmian Group Finland OY
Prysmian Cables y Sistemas de Mexico S. de R. L. de C. V.	Durango	Mexican Peso	173,050,500	99.9983%	Draka Holding B.V
				0.0017%	Draka Mexico Holdings S.A. de C.V.
General Cable de Mexico, S.A de C.V.	Tetla	Mexican Peso	1,329,621,471	80.41733609%	General Cable Industries, Inc.
				19.58266361% 0.00000015%	Conducen, S.R.L. General Cable Technologies Corporation
				0.00000015%	GK Technologies, Incorporated
General de Cable de Mexico del Norte, S.A. de C.V.	Piedras Negras	Mexican Peso	10.000	99.80%	GK Technologies, Incorporated
				0.20%	General Cable Industries, Inc.
PDIC Mexico, S.A. de C.V.	San Jose	Mexican Peso	50.000	99.998%	Conducen, S.R.L
				0.002%	Third parties
Prestolite de Mexico, S.A. de C.V.	Sonora	Mexican Peso	50.000	99.80%	General Cable Industries, Inc.
Servicios Latinoamericanos GC, S.A. de C.V.	Puebla	Mexican Peso	50.000	0.20% 99.998%	GK Technologies, Incorporated General Cable de Mexico, S.A de C.V.
				0.002%	General Cable Technologies Corporation

Legal name Panama	Office	Currency	Share capital	% ownership	Direct parent company
Alambres y Cables de Panama, S.A.	Panama	US Dollar	800.000	78.08%	General Cable Industries, Inc.
				21.92%	Cahosa S.A.
Alcap Comercial S.A.	Panama	US Dollar	10.000	100.00%	Conducen, S.R.L.
Cahosa S.A.	Panama	US Dollar	n/a	100.00%	GK Technologies, Incorporated
Peru
General Cable Peru S.A.C.	Santiago de Surco(Lima)	Peruvian Sol	90,327,867.50	99.99999%	GC Latin America Holdings, S.L.
				0.00001%	Third Paries
Africa
Angola
General Cable Condel, Cabos de Energia e Telecomunicaçoes SA	Luanda	Angolan Kwanza	20,000,000	99.80%	General Cable Celcat, Energia e Telecomunicaçoes SA
				0.20%	Third parties
Botswana
General Cable Botswana (Pty) Ltd.	Gaborone West Industrial	Botswana Pula	100	100%	National Cables (Pty) Ltd.

Ivory Coast
SICABLE - Sociète Ivoirienne de Cables S.A.	Abidjan	CFA Franc	740,000,000	51.00%	Prysmian Cables et Systèmes France S.A.S.
Mauritius				49.00%	Third parties
GC Specialty & Automotive	Port Louis	US Dollar	200	100%	GK Technologies, Incorporated
General Cable Middle East	Port Louis	US Dollar	3,690	100%	GK Technologies, Incorporated
General Cable Trading	Port Louis	US Dollar	31,097,100	100%	GK Technologies, Incorporated
South Africa
	Phoenix	South African Rand
General Cable Phoenix South Africa Pty. Ltd.			1.000	100.00%	GK Technologies, Incorporated
National Cables (Pty) Ltd.	Johannesburg	South African Rand	101	69.30%	Phelps Dodge National Cables Corporation
Tunisia				30.70%	General Cable Holdings Netherlands C.V.
Auto Cables Tunisie S.A.	Grombalia	Tunisian Dinar	4.050,000	50.998%	Prysmian Cables et Systèmes France S.A.S.
				49.002%
					Third parties
Eurelectric Tunisie S.A	Menzel Bouzelfa	Tunisian Dinar	1.850.000	99.97%	Prysmian Cables et Systèmes France S.A.S.
				0.005%	Prysmian (French) Holdings S.A.S.
				0.005%	Prysmian Cavi e Sistemi S.r.I.
				0.020%	Third parties
Oceania
Australia
Prysmian Australia Pty Ltd.	Liverpool	Australian Dollar	56.485.736	100.00%	Prysmian Cavi e Sistemi S.r.I.
New Zealand
Prysmian New Zealand Ltd.	Auckland	New Zealand Dollar	10,000	100.00%	Prysmian Australia Pty Ltd.
General Cable Holdings New Zealand	Christchurch	New Zealand Dollar	160,671,634	86.17%	GK Technologies, Incorporated
				12.96%	General Cable Industries, Inc.
				0.87%	GC Global Holdings, Inc.
General Cable New Zealand Limited	Christchurch	New Zealand Dollar	48,000.100	100.00%	General Cable Holdings New Zealand

Legal name	Office	Currency	Share capital	% ownership	Direct parent company
Saudi Arabia
Prysmian Powerlink Saudi LLC	Al Khoabar	Saudi Arabian Riyal	500.000	95.00%	Prysmian PowerLink S.r.I.
				5.00%	Third parties
China
Prysmian Tianjin Cables Co. Ltd.	Tianjin	US Dollar	36,790,000	67.00%	Prysmian (China) Investment Company Ltd
				33.00%	Third parties
Prysmian Cable (Shanghai) Co.Ltd.	Shanghai	US Dollar	5,000,000	100.00%	Prysmian (China) Investment Company Ltd
Prysmian Wuxi Cable Co. Ltd	Wuxi	US Dollar	29,941,250	100.00%	Prysmian (China) Investment Company Ltd
Prysmian Hong Kong Holding Ltd.	Hong Kong	Euro	72,000,000	100.00%	Prysmian Cavi e Sistemi S.r.I.
Prysmian (China) Investment Company Ltd	Bejing	Euro	72.003.061	100.00%	Prysmian Hong Kong Holding Ltd.
Nantong Haixun Draka Elevator Products Co. LTD	Nantong	US Dollar	2.400.000	75.00%	Draka Elevator Product Inc.
				25.00%	Third parties
Nantong Zhongyao Draka Elevator Products Co. LTD	Nantong	US Dollar	2,000,000	60.00%	Draka Elevator Product Inc.
				40.00%	Third parties
Draka Cables (Hong Kong) Limited	Hong Kong	Hong Kong Dollar	6,500,000	99.9999985%	Draka Cableteq Asia Pacific Holding Pte Ltd.
				0.0000015%	Cable Supply and Consulting Co. Pte Ltd
Draka Shanghai Optical Fibre Cable Co Ltd.	Shanghai	US Dollar	15,580,000	55.00%	Draka Comteq Germany GmbH & Co.KG
				45.00%	Third parties
Suzhou Draka Cable Co. Ltd	Suzhou	Chinese Renminbi (Yuan)	174,500,000	100.00%	Draka Cableteq Asia Pacific Holding Pte Ltd
Prysmian PowerLink Asia Co. Ltd	Suzhou	Euro	0	100.00%	Prysmian (China) Investment Company Ltd.
Prysmian Technology Jiangsu Co. Ltd.	Yixing	Euro	51,150,100	100.00%	Prysmian (China) Investment Company Ltd.
Prestolite Wire (Shanghai) Company, Ltd	Shanghai	US Dollar	300,000	100.00%	General Cable Industries, Inc.

Philippines
Draka Philippines Inc.	Cebu	Philippine Peso	253,652,000	99.9999975%	Draka Holding B.V.
				0.0000025%	Third parties
India
Associated Cables Pvt. Ltd.	Mumbai	Indian Rupee	61,261,900	100.00%	Oman Cables Industry (SAOG)
Jaguar Communication Consultancy Services Private Ltd.	Mumbai	Indian Rupee	76,027,030	99.99998%	Prysmian Cavi e Sistemi S.r.I.
				0.00002%	Prysmian S.p.A.

Legal name	Office	Currency	Share capital	% ownership	Direct parent company
Indonesia
PT.Prysmian Cables Indonesia	Cikampek	US Dollar	67,300,000	99.48%	Draka Holding B.V.
				0.52%	Prysmian Cavi e Sistemi S.r.I.
Malaysia
Sindutch Cable Manufacturer Sdn Bhd	Melaka	Malaysian Ringgit	500,000	100.00%	Draka Cableteq Asia Pacific Holding Pte Ltd
Draka Marketing and Services Sdn Bhd	Melaka	Malaysian Ringgit	500,000	100.00%	Cable Supply and Consulting Company Pte Ltd
Draka (Malaysia) Sdn Bhd	Melaka	Malaysian Ringgit	8,000,002	100.00%	Cable Supply and Consulting Company Pte Ltd
Oman
Oman Cables Industry (SAOG)	Al Rusayl	Omani Riyal	8,970,000	51.17%	Draka Holding B.V.
				48.83%	Third parties
Oman Aluminium Processing Industries LLC	Sohar	Omani Riyal	4,366,000	51.00%	Oman Cables Industry (SAOG)
				49.00%	Third parties
Singapore
Prysmian Cables Asia-Pacific Pte Ltd.	Singapore	Singapore Dollar	213,324,290	100.00%	Draka Holding B.V.
Prysmian Cable Systems Pte Ltd.	Singapore	Singapore Dollar	25.000	50.00%	Draka Holding B.V.
				50.00%	Prysmian Cables & Systems Ltd.
Draka Offshore Asia Pacific Pte Ltd	Singapore	Singapore Dollar	51.000	100.00%	Draka Cableteq Asia Pacific Holding Pte Ltd
Draka Cableteq Asia Pacific Holding Pte Ltd	Singapore	Singapore Dollar	28,630,503.70	100.00%	Draka Holding B.V.
Singapore Cables Manufacturers Pte Ltd	Singapore	Singapore Dollar	1,500,000	100.00%	Draka Cableteq Asia Pacific Holding Pte Ltd
Cable Supply and Consulting Company Private Limited	Singapore	Singapore Dollar	50.000	100.00%	Draka Cableteq Asia Pacific Holding Pte Ltd
Draka Comteq Singapore Pte Ltd	Singapore	Singapore Dollar	500.000	100.00%	Draka Comteq B.V.
Draka NK Cables (Asia) pte Itd	Singapore	Singapore Dollar	200,000	100.00%	Prysmian Group Finland OY
Thailand
MCI-Draka Cable Co. Ltd	Bangkok	Thai Baht	435.900.000	70.250172%	Draka Cableteq Asia Pacific Holding Pte Ltd
				0.000023%	Draka (Malaysia) Sdn Bhd
				0.000023%	Sindutch Cable Manufacturer Sdn Bhd
				0.000023%	Singapore Cables Manufacturers Pte Ltd
				29.749759%	Third parties
General Cable Asia Pacific & Middle East Co., Ltd.	Bangkok	Thai Baht	30,000,000	100.00%	GK Technologies, Incorporated

The following companies have been accounted for using the equity method:

Legal name	Office	Currency	Share capital	% ownership	Direct parent company
Europe
Germany
Kabeltrommel GmbH & Co.KG	Troisdorf	Euro	10,225,837.65	43.18%	Prysmian Kabel und Systeme GmbH
				1.75%	Norddeutsche Seekabelwerke GmbH
				55.07%	Third parties
Kabeltrommel GmbH	Troisdorf	Deutsche Mark	51,000	41.18%	Prysmian Kabel und Systeme GmbH
				5.82%	Norddeutsche Seekabelwerke GmbH
				53.00%	Third parties
Nostag GmbH & Co. KG	Oldenburg	Euro	540,000	33.00%	Norddeutsche Seekabelwerke GmbH
				67.00%	Third parties

n.K.
Rodco Ltd.	Woking	British Pound	5.000.000	40.00%	Prysmian Cables & Systems Ltd.
				60.00%	Third parties
Poland
Eksa Sp.z.o.o	Sokolów	Polish Zloty	394.000	29.949%	Prysmian Cavi e Sistemi S.r.I.
				70.051%	Third parties
Russia
Elkat Ltd.	Moscow	Russian Rouble	10.000	40.00%	Prysmian Group Finland OY
				60.00%	Third parties
Central/South America
Chile
Colada Continua Chilena S.A.	Quilicura (Santiago)	Chile Peso	100	41.00%	Cobre Cerrillos S.A.
Asia				59.00%	Third parties
China
Yangtze Optical Fibre and Cable Joint Stock Limited Co.	Wuhan	Chinese Renminbi (Yuan)	757.905.108	23.73%	Draka Comteq B.V.
				76.27%	Third parties
Yangtze Optical Fibre and Cable (Shanghai) Co. Ltd.	Shanghai	Chinese Renminbi (Yuan)	100,300,000	75.00%	Yangtze Optical Fibre and Cable Joint Stock Limited Co.
				25.00%	Draka Comteq B.V.
Japan
Precision Fiber Opticos Ltd.	Chiba	Japanese Yen	138,000,000	50.00%	Draka Comteq Fibre B.V.
				50.00%	Third parties
Malaysia
Power Cables Malaysia Sdn Bhd	Selangor Darul Eshan	Malaysian Ringgit	18.000.000	40.00%	Draka Holding B.V.
				60.00%	Third parties

List of unconsolidated other investments at fair value through other comprehensive income:

Legal name		% ownership Direct parent company
Asia
India
Ravin Cables Limited	51.00%	Prysmian Cavi e Sistemi S.r.I.
	49.00%	Third parties
United Arab Emirates
Power Plus Cable CO. LLC	49.00%	Ravin Cables Limited
	51.00%	Third parties
Africa
South Africa
Pirelli Cables & Systems (Proprietary) Ltd.	100.00%	Prysmian Cavi e Sistemi S.r.I.

Cina

Phelps Dodge Yantai Cable Co., Ltd.		60.00% Phelps Dodge Yantai China Holdings, Inc.
	40 00%	Terzi
Isole Cayman
Phelps Dodge Yantai China Holdings, Inc.	66.67%	YA Holdings, Ltd.
	33.33%	Terzi

CERTIFICATION OF THE HALF-YEAR CONDENSED CONSOLIDATED FINANCIAL STATEMENTS PURSUANT TO ART. 81-TER OF CONSOB REGULATION 11971 DATED 14 MAY 1999 AND SUBSEQUENT AMENDMENTS AND ADDITIONS

1. The undersigned Valerio Battista, as Chief Executive Officer, and Carlo Soprano and Alessandro Brunetti, as managers responsible for preparing the corporate accounting documents of Prysmian S.p.A., certify, also taking account of the provisions of paragraphs 3 and 4, art. 154-bis of Italian Legislative Decree 58 dated 24 February 1998, that during the first half of 2019 the accounting and administrative processes for preparing the half-year condensed consolidated financial statements:

• have been adequate in relation to the business's characteristics and

• have been effectively applied.,

2. The adequacy of the accounting and administrative processes for preparing the half-year condensed consolidated financial statements at 30 June 2019 has been evaluated on the basis of a procedure established by Prysmian in compliance with the internal control framework published by the Committee of Sponsoring Organizations of the Treadway Commission, which represents the generally accepted standard model internationally.

It is nonetheless reported that:

during the first half of 2019, some of the Prysmian Group's companies have been involved in the information system changeover project. The process of fine-tuning the new system's operating and accounting functions is still in progress for some of them; in any case, the system of controls in place ensures uniformity with the Group's system of procedures and controls.

3. They also certify that:

3.1 The half-year condensed consolidated financial statements at 30 June 2019:

a. have been prepared in accordance with applicable international accounting standards recognised by the European Union under Regulation (EC) 1606/2002 of the European Parliament and Council dated 19 July 2002;
b. correspond to the underlying accounting records and books of account;
c. are able to provide a true and fair view of the issuer's statement of financial position and results of operations and of the group of companies included in the consolidation.

3.2 The interim directors' report contains a fair review of performance and the results of operations, and of the situation of the issuer and the group of companies included in the consolidation, together with a description of the principal risks and uncertainties to which they are exposed.

Milan, 1 August 2019

Chief Executive Officer Managers responsible for preparing corporate accounting documents

Valerio Battista Carlo Soprano Alessandro Brunetti

AUDIT REPORT

127

EY S.p.A. Sede Legale: Via Po, 32 - 00198 Roma Capitale Sociale Euro 2.525.000,00 i.v. Iscritta alla S.O. del Registro delle Imprese presso la C.C.I.A.A. di Roma Codice fiscale e numero di iscrizione 00434000584 - numero R.E.A. 250904 P.IVA 00891231003 Iscritta al Registro Revisori Legali al n. 70945 Pubblicato sulla G.U. Suppl. 13 - IV Serie Speciale del 17/2/1998 Iscritta all'Albo Speciale delle società di revisione Consob al progressivo n. 2 delibera n.10831 del 16/7/1997

A member firm of Ernst & Young Global Limited

AI assistant

Prysmian — Interim / Quarterly Report 2019

4170_ir_2019-08-06_d294a079-f9c9-4e73-aa32-a23702a1f299.pdf

HALF YEAR FINANCIAL REPORT AT 30 JUNE 2019

1

Disclaimer

CONTENTS

DIRECTORS' REPORT

DIRECTORS AND AUDITORS

Introduction

SIGNIFICANT EVENTS DURING THE PERIOD

Finance activities

Mediobanca loan and partial repayment of the Bridge Loan

New revolving credit facility agreement

Other significant events

Antitrust Brazil

Claims for damages as a result of the European Commission's 2014 decision

Western Link

Approval of financial statements at 31 December 2018 and dividend distribution

NEW INDUSTRIAL PROJECTS AND INITIATIVES

Development of power transmission grid in Washington D.C.

Contract to develop a new submarine cable system in Canada (Fundy Isles)

Contract to develop cable system for the first "floating" offshore wind farm in France

Contract to develop cable system for a "floating" offshore wind farm in the United States

Dolwin5 project to connect new wind farms to mainland German grid

CONSOLIDATED FINANCIAL HIGHLIGHTS*

INTRODUCTION

GROUP PERFORMANCE AND RESULTS

REVIEW OF PROJECTS OPERATING SEGMENT

MARKET OVERVIEW

FINANCIAL PERFORMANCE

REVIEW OF ENERGY OPERATING SEGMENT

ENERGY & INFRASTRUCTURE

MARKET OVERVIEW

FINANCIAL PERFORMANCE

INDUSTRIAL & NETWORK COMPONENTS

MARKET OVERVIEW

FINANCIAL PERFORMANCE

OTHER

REVIEW OF TELECOM OPERATING SEGMENT

Optical fibre

Optical cables

Connectivity

FTTx

FTTA (Fibre-To-The-Antenna)

Copper cables

Multimedia Solutions

MARKET OVERVIEW

FINANCIAL PERFORMANCE

RESULTS BY GEOGRAPHICAL AREA

EMEA

North America

LATAM

APAC

GROUP STATEMENT OF FINANCIAL POSITION

RECLASSIFIED STATEMENT OF FINANCIAL POSITION

NET FIXED ASSETS

NET WORKING CAPITAL

NET FINANCIAL DEBT

STATEMENT OF CASH FLOWS

ALTERNATIVE PERFORMANCE INDICATORS

• Net financial debt: sum of the following items:

Reconciliation between the Reclassified Statement of Financial Position presented in the Directors' Report and the Statement of Financial Position contained in the Consolidated Financial Statements and Explanatory Notes at 30 June 2019

Reconciliation between the principal income statement indicators and the Income Statement contained in the Consolidated Financial Statements and Explanatory Notes at 30 June 2019

SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD

Contract for Viking Link project

Contract for inter-array cables for offshore wind farms in the Netherlands

BUSINESS OUTLOOK

FORESEEABLE RISKS IN 20191

STRATEGIC RISKS

Risks associated with the competitive environment

Risks associated with changes in the macroeconomic environment and in demand

Risks associated with dependence on key customers

Risk of instability in the Group's countries of operation

FINANCIAL RISKS

Risks associated with availability of financial resources and their cost

Exchange rate volatility

Interest rate volatility

Credit risk

Liquidity risk

Prysmian Interim / Quarterly Report 2019

FORESEEABLE RISKS IN 2019¹

**Consolidated Income Statement - 2nd quarter 2018 (*)**

**Consolidated Statement of Comprehensive Income - 2nd quarter 2018 (*)**