Profitability improved in the first nine months of 2019

The Board of Directors of Prysmian S.p.A. has approved today the Group's consolidated results for the first nine months of 2019.

• Sales at €8,635M (+0.3% organic change; + 1.3% excluding the Projects segment)

• Solid performance in North America (+3.3%), good performance also in Latin America (+1,6%)

• positive trend of Telecom (+3.8%) and Energy & Infrastructure (+2.4%)

• Order book grows again to €2.15BN; intense tendering activity driven by projects related to energy transition and renewables

•  Adjusted EBITDA grew to €773M (+18.8% vs 9M 2018); 8.9% ratio to Sales (7.5% in 9M 2018)

• Energy & Infrastructure and Telecom performances drive profitability

• Synergies from General Cable integration in line with forecasts

• Net profit increased to €273M (+53.4 vs 9M 2018)

• FY19 guidance confirmed (excluding IFRS 16 positive impacts):

              -Adjusted EBITDA expected in the range of €950M-€1,020M

              -Free Cash Flows forecast at €300M ±10% after €90M restructuring costs

“The sound operating performance in the first nine months of 2019 continued to be primarily driven by North America, in geographical terms, and by the Telecom and Energy & Infrastructure businesses,” commented Chief Executive Officer Valerio Battista. “The Projects business was impacted by the phasing on order execution but is expected to improve as early as late 2019, with an expanding order portfolio and a robust project pipeline. The Group is proving particularly dynamic in seizing opportunities in the renewable energy sector, with the acquisition of important contracts for cabling offshore wind farms, such as Vineyard in the US and Dolwin5 in Germany, and for special cables for wind turbines following the agreement with Siemens Gamesa, as well as and with Dongfang in China for new 10MW turbines. In the reporting period, synergies resulting from the integration with General Cable were in line with forecasts. Profitability improvement, with an increase in margins in the first nine months, makes it possible to confirm the targets for the full year, with Adjusted EBITDA expected in the range of €950M to €1,020M.”

Projects

• Projects order backlog back to growth to €2.15BN; intense tendering activity driven by projects related to energy transition and renewables
• HV Underground: order intake focused on Europe and North America; tendering activity in line with forecasts for German interconnection projects
• Improvement expected in Q4

Sales at 30 September 2019 amounted to €1,247 million, with an organic decrease of 5.4%. Excluding the IFRS 16 impacts, Adjusted EBITDA was €148 million, up compared to €138 million in 2018, which was affected by the €70 million negative impact of the Western Link project in the first half of the 2018.

The profitability of the Submarine Cables and Systems business was chiefly impacted by the phasing on installation operations and several additional work that proved necessary. In July, also thanks to the award of the Viking Link project for a value of nearly €700 million, the Group achieved ahead of time its 2019 targets for projects awarded. Among the main projects acquired in the first nine months of 2019, mention should be made of Vineyard, the first large-scale offshore wind power farm in the United States, with a value of approximately €200 million, as well as of the Dolwin5 project in Europe, connecting new offshore wind power farms to the German mainland power grid, with a value of €140 million. In the submarine telecommunications cable market, the Group acquired an important project in Chile early in the year. The intense tendering activity pursued by the Group continued in the third quarter of the year, with a solid project pipeline (interconnections and offshore wind farms).

The High Voltage order intake was mainly focused on Europe and North America, whereas tendering activities continued as planned with regard to the important SuedLink and SuedOstLink interconnection projects in Germany. Important technological milestones were reached in the first nine months of 2019 with the qualification of the 525 kV P-Laser and XLPE cable systems.

The order backlog of the Projects segment is back to growth: at the end of September 2019 it amounted to €2,150 million, compared to €1,900 million in December 2018. The Group is carrying out an intense tendering activity, particularly with reference to the opportunities arising on the transition to renewable and sustainable energy sources.

To read the full press release, visit the Prysmian homepage.