News Release from Prysmian Group


Wind Industry Profile of

Prysmian S.p.A Q1 2020 Financial Results

Results for the quarter confirm a solid start of the year but impacts of Covid-19 as of the second half of March / German Corridors projects for over one billion euros already awarded to Prysmian, confirming its role as energy transition enabler / Solidity of the economic and financial structure and confirmation of the Group’s cash generation capacity / The Anti Covid-19 measures promptly taken focus on people safety, supply chain reactiveness, business protection, and mitigation of economic and financial impacts

Image: Prysmian GroupImage: Prysmian Group

The Board of Directors of Prysmian S.p.A. has approved today the Group’s consolidated results for the first quarter of 2020.

  • Sales at €2,587M (-5.4% organic change); solid performance in North America (+3.6%), chiefly thanks to Power Distribution. Telecom decreased in line with expectations (-19.0% also due to the comparison with the strong performance recorded in Q1 2019). Energy & Infrastructure slowed down  (-3.4%), broadly as a result of the downtrend reported by Trade & Installers in Marchafter a good start to the year.
  • ADJUSTED EBITDA at €197M (€231 million for Q1 2019); 7.6% ratio to sales (8.3% in Q1 2019). Stable profitability for High Voltage & Submarine and Energy & Infrastructure, and solid performance of Power Distribution in North America. As expected, Telecom was impacted by lower volumes and price pressures.
  • Net Financial Debt in line with expectations and reflecting the seasonal nature of the business at €2,606 million (€2,900 million at 31 March 2019; €2,140 million at 31 December 2019).
  • Solid cash generation, LTM Free Cash Flow at €538 million, improving compared to €433 million for the year ended 31 December 2019.
  • 2020 Guidance withdrawn due to ongoing uncertainty regarding the spread and duration of the pandemic and the related containments measures, as well as the unpredictability of promptness and processes of market demand’s recovery.

“The extraordinary impacts of the Covid-19 pandemic were already visible in the final weeks of the first quarter,” explained Chief Executive Officer Valerio Battista, “and they will probably continue to unfold significantly in the second quarter, yet we are confident in the resilience of our organisation and our business. Our supply chain is proving highly responsive, and we can harness the strong differentiation of the markets and business sectors in which we operate. Important growth drivers like the energy transition are being confirmed, and securing contracts for over one billion to build the new “energy corridors” in Germany confirms our position as an industry leader, as already shown with the completion of the France-Spain, Italy-France, and Germany-Belgium power connections. We are convinced that in the medium term the optical cables business will also benefit from digitalisation and broadband development projects, the need for which is felt by all. It will be a difficult year for everyone, but the measures taken to protect our people and business and the solidity of our operating results and financial structure allow us to look towards the future with the necessary serenity. We will update our 2020 guidance as soon as greater visibility regarding the scenario becomes possible.”


Leveraging the experience gained in China in January and February, the Group has promptly implemented a plan of extraordinary measures designed to manage the situation and mitigate the effects of the Covid-19 pandemic. The Crisis Committee, which involves the first line of management reporting to the CEO at the global level, along with representatives of the most affected functions, has identified three priority areas: safeguarding the health of employees and individuals, ensuring the continuity of operations and the supply chain, and protecting profitability and cash flows.

The measures adopted include further reinforcement of health and hygiene standards in all settings and massive use of remote-working, facilitated by the IT and digital infrastructure, which is proving extremely capable and solid, along with daily monitoring of the basket of strategic suppliers and further enhancement of customer support. In order to protect profitability levels, the Group has launched a plan to contain fixed costs, including through the reduction or rescheduling of non-essential investments in the short term, an increasingly careful management of working capital, and actions such as a freeze on hiring and salary adjustments, but without recourse to rationalisation of the workforce. The Group can draw on the strong geographical differentiation of its operations, with 106 plants worldwide, as well as of the markets in which it operates.


Group sales amounted to €2,587 million, with a -5.4% organic change, mainly due to the slowdown in the Telecom business, which in the same period of 2019 had overperformed. Sales of the Projects business decreased slightly, mainly due to the performance of SURF (influenced by O&G trends) and Submarine Telecom, whereas the impacts of the pandemic started to be felt in the Trade & Installer and Power Distribution businesses, firstly in Asia and in the second half of March in South Europe and Great Britain.

Adjusted EBITDA  amounted to €197 million compared to €231 million for Q1 2019, with a 7.6% ratio to Sales compared to 8.3% for Q1 2019. In the Projects segment, profitability of the strategic High Voltage & Submarine Energy market remained stable, whereas the SURF (equipment for offshore oil and gas extraction) and Submarine Telecom segments were negatively impacted. In the Energy segment, profitability of Energy & Infrastructure remained stable, with the performance of Power Distribution in North America offsetting the drop reported by the Trade & Installers segment, chiefly in South Europe; the Industrial & Network Components market showed a good resilience. As expected volumes reduction and price pressures impacted the profitability of the Telecom segment, although the decrease was partly offset by the cost efficiencies achieved. The Telecom business was also impacted by the lack of the contribution of the Chinese subsidiary YOFC, which was particularly impacted as its headquarters and plants are located in the Hubei province.

EBITDA amounted to €183 million (€220 million in the first three months of 2019), including net expenses for company reorganisation, net non-recurring expenses and other net non-operating expenses totalling €14 million (€11 million in the first three months of 2019).

Operating income amounted to €58 million (€160 million in the first three months of 2019).

Net profit   was €23 million (€88 million for the first three months of 2019).

Net Financial Debt amounted to €2,606 million at 31 March 2020 (€2,900 million at 31 March 2019; €2,140 million at 31 December 2019), in line with forecasts and reflecting the seasonal nature of the business. The solid cash generation capacity was confirmed, with March 2019-March 2020 LTM Free Cash Flow at €538 million, improving compared to €433 million for the year ended 31 December 2019. The main factors that influenced the Net Financial Debt in the past 12 months were:

  • operating cash flows (before changes in working capital) positive at €959 million;
  • a decrease in net working capital amounting to €228 million;
  • cash absorption of €102 million due to restructuring costs and integration of General Cable
  • €95 million for WL project repair expenses and penalties
  • Net operating investments amounting to €264 million;
  • Net financial charges paid amounting to €91 million;
  • Taxes paid amounting to €107 million;
  • Dividends received amounting to €10 million;
  • Dividend distributed amounting to €114 million;
  • €64 million increase in financial liabilities due to the application of IFRS 16
  • Other negative changes amounting to €66 million.



Sales of the Projects segment totalled €347 million for Q1 2020. The performance in the market of submarine power cables and High Voltage Underground remained stable, whereas submarine telecom cables and SURF suffered more (overall organic change of -5.5% compared to Q1 2019). Profitability remained stable, with Adjusted EBITDA at €36 million (€39 million in Q1 2019), and a stable ratio to Sales (10.4% vs 10.6% for the same period of 2019).

The results of the Submarine Cables and Systems business were stable overall, and at the moment there were no particular interruptions of operations due to the Covid-19 pandemic. The main projects underway in the period were: the link between Norway and Great Britain (NSL Link), the link between France and Great Britain (IFA2), the Hainan2 project in China, the interconnections in the Philippines and the Bahrain and the Viking Link project, the interconnection between Great Britain and Denmark. The contribution of the installation services and of the launch on the market of high value-added monitoring and maintenance services should also be noted. Intense tendering activity continued, particularly driven by projects linked to the energy transition towards renewable sources (power interconnections and offshore wind farms).

In the High Voltage Underground Cables and Systems business, the Group has reached a historic milestone with the award of 50% of the two large contracts awarded to date, regarding the German Corridors, which mark a strategic shift towards energy transition in Europe, for an overall amount exceeding €1 billion. The first contract worth approximately €500 million for the SuedOstLink project, one of the longest HVDC (High Voltage Direct Current) underground cable connections in the world, awarded by TenneT TSO GmbH, was followed yesterday by another contract worth over €500 million awarded by Amprion GmbH, a German grid operator, for the A-Nord underground cable connection, part of the 2GW German “Corridor A”. Prysmian's track record of projects completed, its technological expertise reflected in the use of the highly reliable and sustainable ±525 kV HVDC extruded cable system, as well as its project execution capabilities and assets, confirm the Group’s ambition to carry out a strategic role in the transition towards a low-carbon economy.

The Q1 results of the High Voltage Underground Cables and Systems business were affected by the negative performance recorded in the APAC Region, impacted by the pandemic.



Energy & Infrastructure

Energy & Infrastructure sales amounted to €1,239 million, with a -3.4% organic change compared to Q1 2019. Adjusted EBITDA stood at €68 million, stable compared to Q1 2019. Its ratio to Sales improved slightly to 5.5% compared to 5.2% in Q1 2019.

Trade & Installers results were affected both by the Covid-19 pandemic, whose impacts became apparent as of the second week of March, especially in South Europe and Great Britain, and by the deterioration of the Latin American context. The Central-Eastern European markets and the North Europe markets were characterised by a stable trend and greater resilience. Profitability also showed a downtrend, albeit with better performances in North America, thanks to the business mix and an effective cost containment plan.

Power Distribution confirmed its solid performance in Q1 2020, chiefly driven by North America. The business profitability improved thanks to the geographical mix and the implementation of industrial efficiencies.

Overhead lines recorded a solid growth in South America and stable performance in North America.



Sales of the EMEA area in the first three months of 2020 amounted to €1,375 million, with an organic change of -6.1%, due to the negative performance mainly recorded in South Europe and Great Britain; Telecom and Energy & Infrastructure were the weaker businesses. Adjusted EBITDA was €85 million compared to €109 million for the same period of 2019 (its ratio to Sales was 6.2% compared to 7.3% in the first three months of 2019).

North America

In the first three months of the year, North America continued to show an excellent performance. Sales amounted to €864 million, with a positive organic change of +3.6% compared to 2019, particularly attributable to the good performance of the Energy segment, especially Power Distribution and Industrial & NWC. Margins were supported by the business mix and the effective integration. Adjusted EBITDA amounted to €97 million, up on €85 million for the same period of 2019, with an improved ratio to Sales of 11.3% compared to 10.2% in the first three months of 2019.


Sales of the Central-South America Region for the first three months of 2020 amounted to €180 million, with an organic change of -14.6% mainly attributable to Trade & Installers and Telecom. Adjusted EBITDA was €14 million, down from €22 million for the same period of 2019, with a ratio to Sales of 7.9% compared to 9.8% for the first three months of 2019.


In the first three months of 2020, sales in Asia Pacific amounted to €168 million, with an organic change of -24.9%. Adjusted EBITDA was €1 million, compared to €15 million in the same period of 2019, with a declining ratio to sales (0.4% versus 6.7% in the first three months of 2019). The decrease in Adjusted EBITDA was mainly due to the impact of Covid-19 in China and the slowdown of the High Voltage and Power Distribution businesses in Indonesia.


In early 2020, the macroeconomic scenario deteriorated abruptly due to the worldwide spread of the COVID-19 pandemic. In response to this health emergency, the main national governments took containment measures such as restrictions on movement, quarantines and other public emergency initiatives, with severe repercussions on economic activity and the entire economy. The first signs of the impacts of these initiatives are beginning to be seen at the level of the economic performances of the countries first affected by the pandemic.

In response to this crisis, the International Monetary Fund, among the major financial institutions, significantly reduced its economic growth estimates for 2020. According to its forecasts as updated in April 2020, the global economy is expected to decline by 3.0% in 2020, compared to the expected growth of 3.3% forecast at the beginning of January. In any event, these forecasts are subject to a high degree of uncertainty, in view of the lack of visibility regarding various factors, such as the duration of the pandemic, the intensity and efficacy of the containment measures, progress in the health arena, the volatility of commodity prices and the pace of the recovery of demand.

The extraordinary impacts of the Covid-19 pandemic began to affect Prysmian Group’s results, albeit still to a limited degree, already as of the end of the first quarter. Production and market demand in China were severely influenced throughout the first quarter, while in the second week of March the impact began to be felt in the geographical areas mainly affected by the pandemic (South Europe and the UK) and the businesses mainly related to the construction sector (e.g., Trade & Installers).

Prysmian Group’s long-term growth drivers, mainly related to the energy transition to renewable sources, telecommunications infrastructure projects and electrification processes, remain unchanged.

The Group may also rely on broad diversification by business and geographical areas, a solid financial structure, an efficient, flexible supply chain and a lean organisation.

In light of the above considerations on COVID-19, and above all of the persistent uncertainty regarding the scope and duration of the pandemic, the impacts of the containment measures and the present inability to predict the speed and conditions of the recovery of market demand, the Group has decided to withdraw its guidance for the current year, as previously communicated to the market on 5 March. As soon as market conditions so permit, i.e., when there is greater visibility regarding the course of the pandemic, the containment measures taken by the various national governments and the speed of recovery of market demand in the main businesses and geographical areas, the Group will promptly update its forecast Adjusted EBITDA and cash flows for financial year 2020.

Prysmian Group
Press Office
Prysmian, results, Q1, financial results, energy, outlook, projects, Germany, COVID-19, scenario, corridor, energy transition, cables, submarine, offshore, wind farm, energy

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