Prysmian — Investor Presentation 2016

Mar 1, 2017

FY 2016 Financial Results

Milan – March 1st 2017

FY 2016 Highlights

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

Adj. EBITDA at € 711m, highest level since Prysmian's IPO, driven by Energy Projects and Telecom businesses.

Adj. EBITDA margin at 9.4%, recording margin expansion in all businesses (except Oil&Gas), driven by the continuous focus on efficiency, footprint optimization and business mix.

Net Financial Position at € 537m. FY2016 free-cash-flow (levered) excl. acquisitions at € 331m.

• Successful placement of €500m equity-linked bond with 0% coupon and an initial conversion price at 41.25% premium.
• Main objective is supporting potential external growth opportunities and simultaneously assuring shareholders value accretion through the new shares buy-back programme launched.

FY 2016 Key Financials

Euro Millions, % on Sales

* Org. Growth

Sales Adjusted EBITDA (1)

**∆ OCI Contribution FY'16 vs. FY'15

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

Continued profitability improvement

Underlying margin increase in all business excluding Oil&Gas

Adj.EBITDA Bridge FY 2015-2016

Underlying margin increase driven by Energy Projects, Telecom and OCI consolidation

Key Achievements of 2016

New Installation Vessel (Ulisse):

• •Dedicated to shallow water installation activities.
• Maximum transport capacity of 7,000 tons.
• In operations since July 2016.

Major Technology Milestones:

• Full system homologation for:
• 525kV and 600kV XLPE.
• 525kV and 600kV P-Laser
• 700kV MI-PPL

• Flextube® 2112F first installation; world's highest fiber density cable.

Production Footprint Optimization:

• •82 total plants in operation as of 31 December 2016 (including OCI's 2 plants), vs. 98 following Draka acquisition.
• •6 plant closed during 2016.
• •Streamlining of logistic flows and creation of excellence centers worldwide.

FY 2016 Highlights

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

Energy Projects

Euro Millions, % on Sales

* Org. Growth

Adj. EBITDA / % of Sales

* Excl. €24m WL previous loss write-up.

Highlights Submarine • Sound double-digit organic growth benefitting from a favourable project phasing and effective execution. • Adj.EBITDA margin driven by strong revenue growth, sound execution and new installation assets.

• Strong market outlook in 2017 with expected awards both in offshore wind farms and interconnections. New contract awarded in Q1 2017 worth more than €300m for offshore wind farm grid connection in France.

Underground High Voltage

• Positive performance, both in terms of sales increase and profitability. North America and APAC recorded a sound growth.
• Strengthened industrial presence in China: acquisition of 100% manufacturing plant focused on HV cables and divestment of the 67% stake in Baosheng JV.
• New contract worth approximately € 79m for a new interconnection between France and UK through the channel tunnel confirms sound market prospective.

Orders Backlog Evolution (€m)
	Dec '13	Dec '14	Dec '15	Jun '16	Dec '16
Underground HV	~450	~450	~600	~500	~350*
Submarine	~2,050	~2,350	~2,600	~2,450	~2,050
Group	~2,500	~2,800	~3,200	~2,950	~2,400
* Excluding € 70m backlog of China and new project awarded in Q1 2017.

Energy & Infrastructure

Euro Millions, % on Sales

Sales

Adj. EBITDA / % of Sales

** ∆ OCI Contribution FY '16 vs. FY '15

Highlights

Trade & Installers

• Negative organic trend driven by sharp decline in South America and moderate slowdown in Central Eastern and Southern Europe. Positive performance in the Nordics and Australia.
• Footprint optimization, better mix and full consolidation of OCI supported Adj.EBITDA margin.

Power Distribution

• 2016 sales substantially stable, with slowdown in Q4 in line with expectations. Adj.EBITDA margin benefitted from a better mix.
• Nordics and APAC regions showed a solid trend during the year, offset by slowdown in South America and strong reduction of the utilities investments in Germany in line with expectations.

LTM Adj. EBITDA Evolution / % on LTM Sales

Industrial & Network Components

Euro Millions, % on Sales

1,440 1,499 1,343 2014 2015 2016 * Org. Growth -4.6%* -0.8%*

Adj. EBITDA / % of Sales

Sales Highlights

Specialties, OEMs & Renewables

• Mid single digit organic decline, due to slowdown in Renewables segment (mainly China) and volume drop in Mining, Nuclear and Railway, partially offset by the strong performance in Defense and Marine.
• Sound results in North America; general weakness in Europe, Turkey and Argentina.
• Profitability sustained by favourable product and country mix.

Elevator

• Sound growth driven by a solid performance in North America and EMEA, partially offset by weakening trend in China.
• Increasing penetration in after market products and services supported margin growth.

Automotive

• Stable volume with better margin benefitting from re-footprint in Europe and favourable product mix. Solid market demand in APAC compensated the weakness of Latin America.

Network Components

• Sound performance in HV and Extra HV supported by footprint optimization in Europe and China and the launch of new products.
• Soft demand in MV and LV accessories in Europe, offset by good performance in North America and APAC.

Oil & Gas Euro Millions, % on Sales

* Org. Growth

Adj. EBITDA / % of Sales

	Highlights
SURF
•	Umbilical: Sharp volumes drop, in line with the expected market evolution due to Petrobras limited orders in 2016.
•	DHT: Slight decline in Sales and Adj.EBITDA, partially compensated by the consolidation of GCDT since October 2015. Continue pressure from customers' inventory reduction and projects postponement.
	Core Oil&Gas Cables
•	Organic sales slump driven by the shortfall of market activity in Drilling, Offshore projects and ESP (Electrical Submergible Pump) segments.

• Stabilizing trend in Q4.
• Focus on cost-effective supply chain initiatives and footprint optimization to limit margin erosion.

Quarterly organic growth* evolution

FY 2016 Financial Results 12

Telecom Euro Millions, % on Sales

* Org. Growth

Adj. EBITDA / % of Sales

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

Highlights

Telecom Solutions

• Positive trend in Optical cables and fiber, accelerating in Q4, driven by solid performance in the US, France, Eastern Europe and Australia.
• Investments in fiber manufacturing efficiency paying off.
• Adj.EBITDA Margin benefitting from production footprint rationalization with the creation of excellence centres worldwide.
• Double-digit organic trend in copper cables fuelled by the positive market momentum in Australia.

MMS

• Profitable growth in Europe supported by production capacity extension in copper cables business and footprint optimization in fiber cable. Positive performance in South America.

Quarterly LTM Adj. EBITDA and % on Sales evolution

FY 2016 Highlights

• o Group overview
• o Results by business

Financial results

Appendix

	FY 2016	FY 2015	∆ OCI contrib. FY '16 vs. FY '15
Sales YoY total growth YoY organic growth	7,567 2.8% 1.0%	7,361 7.6% 5.3%	537 0.0% 0.0%
Adj.EBITDA	711	623	3
% on sales	9.4%	8.5%	7
Adjustments	(66)	(1)	(5)
EBITDA	645	622	3
% on sales	8.5%	8.4%	2
Adj.EBIT	538	473	1
% on sales	7.1%	6.4%	0
Adjustments	(66)	(1)	(5)
Special items	(25)	(73)	-
EBIT	447	399	5
% on sales	5.9%	5.4%
Financial charges	(79)	(89)	(2)
EBT	368	310	3
% on sales	4.9%	4.2%
Taxes	(106)	(96)	(2)
% on EBT	(28.8%)	(31.0%)
Net Income	262	214	1
% on sales	3.5%	2.9%
Minorities	1 6	-	8
Group Net Income	246	214	(7)
% on sales	3.3%	2.9%

	FY 2016	FY 2015
Non-recurring Items (Antitrust Investigation)	1	2 9
Restructuring	(50)	(48)
Other Non-operating Income / (Expenses)	(17)	1 8
EBITDA adjustments	(66)	(1)
Special items	(25)	(73)
Gain/(loss) on metal derivatives	5 4	(27)
Assets impairment	(30)	(21)
Other	(49)	(25)
EBIT adjustments	(91)	(74)

	FY 2016	FY 2015
Net interest expenses	(62)	(73)
of which non-cash conv.bond interest exp.	(8)	(8)
Bank fees amortization	(4)	(4)
Gain/(loss) on exchange rates	(9)	(31)
Gain/(loss) on derivatives 1 )	(3)	1 2
Non recurring effects	(2)	(2)
Other	1	9
Net financial charges	(79)	(89)

1) Includes currency and interest rate derivatives

	31 Dec 2016	31 Dec 2015*
Net fixed assets	2,630	2,581
of which: goodwill	448	452
of which: intangible assets	344	371
of which: property, plants & equipment	1,631	1,552
Net working capital	325	347
of which: derivatives assets/(liabilities)	7	(41)
of which: Operative Net working capital	318	388
Provisions & deferred taxes	(360)	(330)
Net Capital Employed	2,595	2,598
Employee provisions	383	341
Shareholders' equity	1,675	1,507
of which: attributable to minority interest	227	229
Net financial position	537	750
Total Financing and Equity	2,595	2,598

* Restated figures

	FY 2016	FY 2015	Full OCI FY 2016 Cash-flow
Adj.EBITDA	711	623	52
Adjustments	(66)	(1)	(5)
EBITDA	645	622	47
Net Change in provisions & others	-	(75)	-
Share of income from investments in op.activities	(31)	(39)	-
Cash Flow from operations (bef. WC changes)	614	508	47
Working Capital changes	6 7	243	55
Dividends received	1 0	1 7	-
Paid Income Taxes	(76)	(71)	(6)
Cash flow from operations	615	697	96
Acquisitions & Disposals	3 1	(138)	-
Net Operative CAPEX	(227)	(200)	(6)
of which acquisitions of assets of ShenHuan	(11)	-	-
Free Cash Flow (unlevered)	419	359	90
Financial charges	(68)	(100)	(1)
Free Cash Flow (levered)	351	259	89
Free Cash Flow (levered) excl. Acquisitions & Disposals**	331	397	89
Dividends	(102)	(91)	(11)*
Treasury shares buy-back & other equity movements	-	3	-
Net Cash Flow	249	171	78
NFP beginning of the period	(750)	(802)
Net cash flow	249	171
Other variations	(36)	(119)
NFP end of the period	(537)	(750)	* Considering only dividends paid to
** Calculated as FCF (levered) excluding acquisitions of assets of ShenHuan	and "Acquisitions & Disposals".		minority shareholders

Dividend proposal

(1) Outstanding shares as of February 24, 2017

(2) Shares with dividend right: Total shares outstanding (216,720,922) – Treasury shares owned by the Company (3,706,228) as of February 24, 2017.

(3) Based on 2016 average price (€ 20.93)

Successful placement of €500m equity-linked bond

Equity-linked Bond

New Shares Buy-Back Programme

AMOUNT	TREASURY SHARES CURRENTLY OWNED	PERIOD	OBJECTIVES
 Up to €125 mln	 3.706.228 shares*  Of which 1.087.911 purchased as of February 24, 2017 since the beginning of the program on January 23, 2017.	Start 23 Jan. 2017  End 30 Sep. 2017 	 To serve possible M&A deals with shares exchange  To serve any conversion right under the bond

* Treasury shares as of February 24, 2017.

FY 2016 Highlights

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

Prysmian group at a glance

FY 2016 Financial Results

Sales breakdown by business Sales breakdown by geography

Adj. EBITDA by business Adj. EBITDA margin

Sales breakdown Energy Projects

Sales by business Sales by geographical area Submarine 68% High Voltage 32% Sales FY16 € 1,634 m EMEA 87% North America 4% Latin America 2% APAC 7% Sales FY16 € 1,634 m

Energy & Infrastructure

Sales breakdown

Industrial & Network Components

Sales breakdown

Sales breakdown Oil & Gas

Core Oil&Gas Cables 59% SURF 41% Sales by business Sales by geographical area Sales FY16 € 300 m Sales FY16 € 300 m EMEA 28% North America 20% Latin America 27% APAC 25%

Telecom Sales breakdown

Bridge Consolidated Sales

Profit and Loss Statement

	FY 2016	FY 2015	∆ OCI contrib. FY '16 vs. FY '15	Full OCI FY'16 Results
Sales	7,567	7,361	537	537
YoY total growth	2.8%	7.6%	0.0%	0.0%
YoY organic growth	1.0%	5.3%	0.0%	0.0%
Adj.EBITDA	711	623	3 7	5 2
% on sales	9.4%	8.5%		9.7%
of which share of net income	3 1	3 9	(15)	-
Adjustments	(66)	(1)	(5)	(5)
EBITDA	645	622	3 2	4 7
% on sales	8.5%	8.4%		8.7%
Adj.EBIT	538	473	1 0	2 5
% on sales	7.1%	6.4%		4.6%
Adjustments	(66)	(1)	(5)	(5)
Special items	(25)	(73)	-	-
EBIT	447	399	5	2 0
% on sales	5.9%	5.4%		3.7%
Financial charges	(79)	(89)	(2)	(2)
EBT	368	310	3	1 8
% on sales	4.9%	4.2%		3.4%
Taxes	(106)	(96)	(2)	(2)
% on EBT	(28.8%)	(31.0%)		(11.4%)
Net Income	262	214	1	1 6
% on sales	3.5%	2.9%		3.0%
Minorities	1 6	-	8	8
Group Net Income	246	214	(7)	8
% on sales	3.3%	2.9%		1.4%

	FY 2016	FY 2015
Sales to Third Parties	1,634	1,416
YoY total growth	15.4%	0.0%
YoY organic growth	18.5%	0.0%
Adj. EBITDA	260	221
% on sales	15.9%	15.6%
Adj. EBIT	224	187
% on sales	13.7%	13.2%

Energy Products Segment – Profit and Loss Statement

		FY 2016	FY 2015	∆ OCI Contribution FY '16 vs. FY '15
	E&I	3,016	2,795	537
	YoY total growth	7.9%		0.0%
s e	YoY organic growth	(3.1%)		0.0%
rti a	Industrial & Netw. Comp.	1,343	1,499	-
P d	YoY total growth	(10.4%)		0.0%
r hi	YoY organic growth	(4.6%)		0.0%
T	Other	110	121	-
o	YoY total growth	(8.6%)		0.0%
s t e	YoY organic growth	(4.4%)		0.0%
al	ENERGY PRODUCTS	4,469	4,415	537
S	YoY total growth	1.2%		0.0%
	YoY organic growth	(3.6%)		0.0%
	E&I	154	128	3 7
A	% on sales	5.1%	4.6%	0.0%
D T	Industrial & Netw. Comp.	127	122	-
BI	% on sales	9.5%	8.1%	0.0%
E	Other	(1)	2	-
dj.	% on sales	(0.8%)	1.9%	0.0%
A	ENERGY PRODUCTS	280	252	3 7
	% on sales	6.3%	5.7%	0.0%
	E&I	9 2	9 3	1 0
	% on sales	3.0%	3.3%	0.0%
T	Industrial & Netw. Comp.	108	100	-
BI E	% on sales	8.0%	6.7%	0.0%
dj.	Other	(2)	-	-
A	% on sales	(1.9%)		0.0%
	ENERGY PRODUCTS	198	193	1 0
	% on sales	4.4%	4.4%	0.0%

	FY 2016	FY 2015
Sales to Third Parties	300	421
YoY total growth	(28.9%)	0.0%
YoY organic growth	(29.3%)	0.0%
Adj. EBITDA	8	1 6
% on sales	2.7%	3.8%
Adj. EBIT	(7)	3
% on sales	(2.4%)	0.7%

	FY 2016	FY 2015
Sales to Third Parties YoY total growth YoY organic growth	1,164 4.9% 8.5%	1,109 11.6% 9.9%
Adj. EBITDA % on sales	163 14.0%	134 12.1%
Adj. EBIT % on sales	123 10.6%	9 0 8.1%

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 J-17 Brent \$/bbl Brent €/bbl

EUR / USD EUR / GBP EUR / BRL

Based on monthly average data Source: Nasdaq OMX

Disclaimer

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