SOLID START TO THE YEAR. SALES RECOVERED

The Board of Directors of Prysmian S.p.A. has approved today the Group’s consolidated results for the first quarter of 2021.

“We have seen positive signs in the first quarter of the year, despite the on-going macroeconomic and market uncertainty” commented CEO Valerio Battista. “As a Group with a highly diversified geographical presence and business portfolio, we remain resilient to the challenges and we are well-positioned to benefit from the recovery opportunities across our markets and business divisions. “During the period, the growth ofthe Energy segment has exceeded pre-pandemic levels and we have seen clear recovery in the Telecom segment, with volumes rising, despite on-going pricing pressure. Our Projects division remains impacted by project execution phasing, however we expect to see improvements as early as the second half of 2021. The Group’s return to organic growth during the quarter has also been accompanied by a stabilisation of profit margins, and we remain a strong cash-generative business continuing the positive trend in 2020. We are increasingly confident in guidance for the full year and that we have the technology, assets and strong organisational setup to capitalise further on energy transition and digitalisation opportunities in the medium term”.

FINANCIAL RESULTS

Group sales amounted to €2,810 million with a +4.6% organic change, excluding the Projects segment, sharply reversing the trend compared to Q4 2020. In the first quarter, signs of a sharp recovery were mainly recorded by the Telecom segment, with an organic growth of +11.4%, and the Energy segment, which reported a +3.4% organic growth, fuelled by the recovery of the construction and renewable energy sectors. The Projects segment continued to be impacted by the phasing on the projects in the portfolio, although signs of a recovery are expected in the second quarter following the acceleration of the development of the German Corridors.

Adjusted EBITDA rose to €213 million compared to €197 million for the first quarter of 2020, despite the negative impact of exchange rates (€14 million). The Adjusted EBITDA improvement was driven by both the volume recovery and the resilience shown by the whole organisation in ensuring business continuity and customer proximity. Margins remained significantly stable, with the ratio of Adjusted EBITDA to sales at 7.6%, confirming the soundness of the efficiency-building measures undertaken, which offset the impact of the increase in raw material prices. The Energy segment reported an excellent performance, with margins that improved also compared to the pre-pandemic levels. Thanks to the cost containment measures, the Telecom segment was also able to limit the impact of the persistent price pressure and report gradually improving margins compared to Q1 2020. In the Projects segment, profitability is expected to recover in the second half of the year.

EBITDA grew to €199 million (€183 million in Q1 2020), including net expenses for company reorganisations, net non-recurring expenses and other net non-operating expenses stable at €14 million.

Operating income rose to €123 million, compared to €58 million in the first quarter of 2020. Net profit attributable to owners of the parent improved markedly to €76 million compared to €23 million in the same period of 2020.

The strong cash flow generation continued, with a Free Cash Flow of €553 million in the past 12 months (excluding the €112 million cash out for the dispute with antitrust authorities). In the first quarter of 2021, the cash generation allowed the Group to forge ahead with the further reduction of its Net Financial Debt, which amounted to €2,325 million at the end of March 2021 (€2,606 million at 31 March 2020 - €1,986 million at 31 December 2020). The factors that allowed to reduce the net financial debt were:

• net operating cash flows (before changes in net working capital) amounting to €813 million;
• net cash flows for payments related to restructuring and non-operating costs amounting to €76 million;
• net flows generated by the €255 million decrease in net working capital;
• cash outflows for net investments amounting to €221 million;
• net finance costs paid amounting to €90 million;
• taxes paid amounting to €137 million;
• dividends collected totalling €9 million.

To read the full press release, please visit the Prysmian website.