Prysmian — Investor Presentation 2016

Nov 8, 2016

9M 2016 Financial Results

Milan – November 8th, 2016

9M 2016 Highlights

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

Adj. EBITDA at € 527m (9.3% on Sales), with margin expansion in all businesses, except O&G.

Continued focus on cost efficiency with relevant progress in manufacturing footprint optimization.

+1.8% Organic Growth, driven by solid trends in the Telecom business and sound execution in Energy Projects, in line with H1.

Net Financial Position at €1,017m (€822m excl. OCI and GCDT acquisition impact). Q3 2016 LTM Free cash flow before acquisitions at €302m.

9M 2016 Key Financials

Euro Millions, % on Sales

* Org. Growth

623

473

449*

2015 9M '15 9M '16

8.5% 8.5% 9.3%

527

28**

**∆ OCI Contribution 9M'16 vs. 9M'15

annualized last quarter sales;

Continued profitability improvement

Underlying margin increase in all business excluding Oil&Gas

Production capacity rationalization in progress.

15 plants closed to date since Draka acquisition, 2 closure ongoing: improve saturation in Europe

9M 2016 Highlights

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

Energy Projects

Euro Millions, % on Sales

Sales

^* Org. Growth

Highlights

• Strong revenue growth driven by solid execution and favourable project phasing in the first 9M.
• Recent investments in execution capabilities and installation assets start paying-off, as shown by the sharp increase in underlying Adj.EBITDA margin vs. last year (excl. €24m WL previous loss write-up).
• Expected pick-up of offshore wind farm projects activity in Europe. Stable outlook in Interconnection market. Market fundamentals remain solid.

Underground High Voltage

Submarine

• Sound performance mainly driven by execution of France-Italy HVDC project and positive results in North America and APAC.
• Positive market outlook in the Middle-East, APAC and Central Europe in the medium-term.

Orders Backlog Evolution (€m)
	Dec '13	Dec '14	Dec '15	Jun '16	Sep '16
Underground HV	~450	~450	~600	~500	~400
Submarine	~2,050	~2,350	~2,600	~2,450	~2,200
Group	~2,500	~2,800	~3,200	~2,950	~2,600

9M 2016 Financial Results 8

Energy & Infrastructure

Euro Millions, % on Sales

Adj. EBITDA / % of Sales

**∆ OCI Contribution 9M '16 vs. 9M '15 * +0.4% ∆ OCI Contrib. 9M '16 vs. 9M '15 on margin

Highlights Trade & Installers • Negative organic trend with an improving Adj. EBITDA margin thanks to OCI consolidation, better mix and footprint optimization. • Organic decline in South America, APAC and Central & Southern Europe partially offset by positive Nordics.

Power Distribution

• Positive trend, softening in Q3 in line with expectations, with a general improvement in profitability in the first 9M.
• Growth in the Nordics, Netherlands and APAC, offset by the expected slowdown in Germany.

LTM Adj. EBITDA Evolution / % on LTM Sales

Industrial & Network Components

Euro Millions, % on Sales

* Org. Growth

Adj. EBITDA / % of Sales

Sales Highlights

Specialties & OEMs

• Negative organic sales in the first 9M driven by soft start in Renewables (mainly in China) and market slowdown in Nuclear, Crane and Mining, partially offset by solid performance in Defense and Marine applications.
• South America underperformance continue as political election in Argentina and macro slowdown in Brazil impact the business.

Elevator

• Positive performance driven by the market share expansion in new product segments and services in North America. Softening trend in APAC in Q3.

Automotive

• Recovery in volumes and profitability thanks to positive market trend in APAC and manufacturing set-up in Central-Eastern Europe.

Network Components

• Growth in HV and EHV accessories sales partially offset by soft market conditions of MV business in Europe.

Oil & Gas Euro Millions, % on Sales

Sales

421 331 225 2015 9M '15 9M '16 -31.6%*

* Org. Growth

Adj. EBITDA / % of Sales

Highlights
•	Umbilical: Volumes and profitability evolution in line with expectations, reflecting the updated (new contractual terms) framework agreement in Brazil.
•	DHT: Results in line with 9M 2015 benefitting from the full impact of GCDT. Continue pressure coming from customers' inventory reduction.

Core Oil&Gas Cables

SURF

• Decline in volumes and prices reflects negative projects phasing in Onshore and Offshore segment. Market environment remains challenging.
• Focus on restructuring and footprint optimization, continue to leverage on Asian supply chain.

Quarterly organic growth* evolution

Telecom Euro Millions, % on Sales

Sales

* Org. Growth

Adj. EBITDA / % of Sales

* Adj. EBITDA margin excl. bad

Highlights

Telecom Solutions

• Growth in optical cables and fiber businesses, with a continued solid trend in Australia, US and France.
• Sharp margin expansion (also considering the €8mln bad-debt provision) fuelled by fiber manufacturing efficiency improvement and footprint optimization.
• Excellent performance in copper telecom cables driven by solid market demand in APAC.

MMS

• Profitable growth in Europe supported by production capacity extension in copper business and footprint optimization.

Agenda

9M 2016 Highlights

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

FY 2016 Outlook

Margin improvement mainly driven by Energy Projects and Telecom. Negative FX.

* Includes management expectations on OCI incremental contribution to FY 2016 adjusted EBITDA. Assuming current consolidation perimeter of Prysmian Group.

2016 Adj.EBITDA Target (€ million)* 2016 Adj.EBITDA Target Assumptions (€ million)

Above mid-point target assumptions:

• Solid execution in Energy Projects
• Strong market trend in Telecom
• Energy Products businesses broadly stable.
• Negative trend in Oil&Gas.
• Adverse Forex impact.

9M 2016 Highlights

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

Financial results

Appendix

	9M 2016	9M 2015	∆ OCI contrib. 9M '16 vs. 9M '15
Sales YoY total growth YoY organic growth	5,660 1.6% 1.8%	5,569 0.0% 0.0%	403
Adj.EBITDA	527	473	2
% on sales	9.3%	8.5%	8
Adjustments	(39)	(28)	(5)
EBITDA	488	445	2
% on sales	8.6%	8.0%	3
Adj.EBIT	398	364	8
% on sales	7.0%	6.5%
Adjustments	(39)	(28)	(5)
Special items	(26)	(52)	-
EBIT	333	284	3
% on sales	5.9%	5.1%
Financial charges	(58)	(77)	(1)
EBT	275	207	2
% on sales	4.9%	3.7%
Taxes	(77)	(68)	(1)
% on EBT	(28.0%)	(32.9%)
Net Income	198	139	1
% on sales	3.5%	2.5%
Minorities	1 0	(2)	6
Group Net Income	188	141	(5)
% on sales	3.3%	2.5%

	9M 2016	9M 2015
Non-recurring Items (Antitrust Investigation) Restructuring Other Non-operating Income / (Expenses)	- (27) (12)	2 1 (32) (17)
EBITDA adjustments	(39)	(28)
Special items Gain/(loss) on metal derivatives Assets impairment Other	(26) 2 4 (15) (35)	(52) (29) (7) (16)
EBIT adjustments	(65)	(80)

	9M 2016	9M 2015
Net interest expenses of which non-cash conv.bond interest exp.	(44) (6)	(59) (6)
Bank fees amortization Gain/(loss) on exchange rates Gain/(loss) on derivatives 1 ) Non recurring effects Other	(2) - (11) (2) 1	(3) (30) 1 9 (3) (1)
Net financial charges	(58)	(77)

	30 Sep 2016	New Perimeter Acquired	30 Sep 2015	31 Dec 2015*
Net fixed assets	2,578	350	2,224	2,581
of which: goodwill	442	67	381	452
of which: intangible assets	339	192	164	371
of which: property, plants & equipment	1,580	91	1,418	1,552
Net working capital	693	212	571	347
of which: derivatives assets/(liabilities)	(8)	1	(36)	(41)
of which: Operative Net working capital	701	211	607	388
Provisions & deferred taxes	(303)	(41)	(279)	(330)
Net Capital Employed	2,968	521	2,516	2,598
Employee provisions	393	4	357	341
Shareholders' equity	1,558	-	1,204	1,507
of which: attributable to minority interest	223	190	32	229
Net financial position	1,017	5 5	955	750
Total Financing and Equity	2,968	5 9	2,516	2,598

	9M 2016	9M 2015
Adj.EBITDA Adjustments EBITDA	527 (39) 488	473 (28) 445
Net Change in provisions & others Share of income from investments in op.activities Cash Flow from operations (bef. WC changes)	(12) (24) 452	(41) (27) 377
Working Capital changes Dividends received Paid Income Taxes Cash flow from operations	(342) 7 (53) 6 4	(198) 1 5 (39) 155
Acquisitions Net Operative CAPEX Free Cash Flow (unlevered)	- (152) (88)	- (117) 3 8	LTM Q3 2016 Free
Financial charges Free Cash Flow (levered)	(57) (145)	(88) (50)	Cash Flow (levered) excl. acquisitions
Free Cash Flow (levered) excl. acquisitions	(145)	(50)	302
Dividends Treasury shares buy-back & other equity movements Net Cash Flow	(101) - (246)	(91) 3 (138)
NFP beginning of the period	(750)	(802)
Net cash flow Other variations	(246) (21)	(138) (15)
NFP end of the period	(1,017)	(955)

9M 2016 Highlights

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

Appendix

Bridge Consolidated Sales

Profit and Loss Statement

	9M 2016	9M 2015	∆ OCI contrib. 9M'16 vs. 9M'15	Full OCI 9M'16 Results
Sales YoY total growth YoY organic growth	5,660 1.6% 1.8%	5,569 0.0% 0.0%	403 0.0% 0.0%	403
Adj.EBITDA % on sales	527 9.3%	473 8.5%	2 8 0.0%	3 9 9.7%
of which share of net income Adjustments	2 4 (39)	2 7 (28)	- (5)	0 (5)
EBITDA % on sales	488 8.6%	445 8.0%	2 3 0.0%	3 4 8.4%
Adj.EBIT % on sales	398 7.0%	364 6.5%	8 0.0%	1 9 4.8%
Adjustments Special items	(39) (26)	(28) (52)	(5) -	(5) -
EBIT % on sales	333 5.9%	284 5.1%	3 0.0%	1 4 3.5%
Financial charges	(58)	(77)	(1)	(1)
EBT % on sales	275 4.9%	207 3.7%	2 0.0%	1 3 3.2%
Taxes % on EBT	(77) (28.0%)	(68) (32.9%)	(1) 0.0%	(1) (10.8%)
Net Income % on sales	198 3.5%	139 2.5%	1 0.0%	1 2 3.0%
Minorities	1 0	(2)	6	6
Group Net Income % on sales	188 3.3%	141 2.5%	(5) 0.0%	6 1.5%

Energy Projects Segment – Profit and Loss Statement Euro Millions

	9M 2016	9M 2015
Sales to Third Parties	1,172	993
YoY total growth	18.0%	0.0%
YoY organic growth	20.9%	0.0%
Adj. EBITDA	172	153
% on sales	14.6%	15.4%
Adj. EBIT	146	131
% on sales	12.4%	13.1%

Energy Products Segment – Profit and Loss Statement

		9M 2016	9M 2015	∆ OCI Contribution 9M '16 vs. 9M '15
	E&I	2,300	2,175	403
s e	YoY total growth	5.8%	0.0%	0.0%
	YoY organic growth	(1.9%)	0.0%	0.0%
rti a	Industrial & Netw. Comp.	1,021	1,137	-
P d	YoY total growth	(10.2%)	0.0%	0.0%
r hi	YoY organic growth	(2.5%)	0.0%	0.0%
T	Other	7 7	8 6	-
o s t	YoY total growth	(11.0%)	0.0%	0.0%
e	YoY organic growth	(3.9%)	0.0%	0.0%
al S	ENERGY PRODUCTS	3,398	3,398	403
	YoY total growth	(0.0%)	0.0%	0.0%
	YoY organic growth	(2.1%)	0.0%	0.0%
	E&I	123	9 9	2 8
A	% on sales	5.4%	4.5%	0.0%
D	Industrial & Netw. Comp.	9 5	9 2	-
T BI	% on sales	9.3%	8.1%	0.0%
E	Other	(1)	2	-
dj.	% on sales	(0.8%)	1.8%	0.0%
A	ENERGY PRODUCTS	217	193	2 8
	% on sales	6.4%	5.7%	0.0%
	E&I	7 6	7 2	8
T	% on sales	3.3%	3.3%	0.0%
BI	Industrial & Netw. Comp.	8 1	7 5	-
E	% on sales	7.9%	6.6%	0.0%
dj.	Other	(2)	1	-
A	% on sales	(2.2%)	0.6%	0.0%
	ENERGY PRODUCTS	155	148	8
	% on sales	4.6%	4.4%	0.0%

Oil&Gas Segment – Profit and Loss Statement

	9M 2016	9M 2015
Sales to Third Parties	225	331
YoY total growth	(31.8%)	0.0%
YoY organic growth	(31.6%)	0.0%
Adj. EBITDA	9	2 1
% on sales	4.1%	6.2%
Adj. EBIT	(2)	1 2
% on sales	(1.0%)	3.7%

Telecom Segment – Profit and Loss Statement

	9M 2016	9M 2015
Sales to Third Parties	865	847
YoY total growth	2.2%
YoY organic growth	8.4%
Adj. EBITDA	129	106
% on sales	14.9%	12.6%
Adj. EBIT	9 9	7 3
% on sales	11.4%	8.6%

Reference Scenario

Commodities & Forex

25 50 75 100 125 150 J-08 J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 Brent \$/bbl Brent €/bbl

Based on monthly average data Source: Nasdaq OMX

Disclaimer

• The managers responsible for preparing the company's financial reports, A.Bott and C.Soprano, declare, pursuant to paragraph 2 of Article 154-bis of the Consolidated Financial Act, that the accounting information contained in this presentation corresponds to the results documented in the books, accounting and other records of the company.
• Certain information included in this document is forward looking and is subject to important risks and uncertainties that could cause actual results to differ materially. The Company's businesses include its Energy Projects, Energy Products and Telecom Operating Segments, and its outlook is predominantly based on its interpretation of what it considers to be the key economic factors affecting these businesses.
• Any estimates or forward-looking statements contained in this document are referred to the current date and, therefore, any of the assumptions underlying this document or any of the circumstances or data mentioned in this document may change. Prysmian S.p.A. expressly disclaims and does not assume any liability in connection with any inaccuracies in any of these estimates or forward-looking statements or in connection with any use by any third party of such estimates or forward-looking statements. This document does not represent investment advice or a recommendation for the purchase or sale of financial products and/or of any kind of financial services. Finally, this document does not represent an investment solicitation in Italy, pursuant to Section 1, letter (t) of Legislative Decree no. 58 of February 24, 1998, or in any other country or state.
• In addition to the standard financial reporting formats and indicators required under IFRS, this document contains a number of reclassified tables and alternative performance indicators. The purpose is to help users better evaluate the Group's economic and financial performance. However, these tables and indicators should not be treated as a substitute for the standard ones required by IFRS.