Company Presentation. Cable Conference. ABN AMRO - London, 10th January 2008

Transcription

1 Company Presentation Cable Conference ABN AMRO - London, 10th January 2008

2 Agenda Company Overview Financials Outlook Appendix 1

3 A Global Cable Manufacturer The Prysmian Group operates 54 plants, has subsidiaries in 34 countries with 12,599 employees (Sept 07) and sells its products worldwide Production plant Countries with physical presence Energy Cables & Systems Telecom Cables & Systems Total LTM 9M 2007 Sales 4,626m 533m 5,159m % of Total Sales 90% 10% LTM 9M 2007 Adj. EBITDA 1 451m 41m 492m % of Sales 9.7% 7.7% 9.5% 1 EBITDA adjusted excluding non-recurring items. 2

4 A Complete and Diversified Presence and Product Offering Sales LTM 9M 2007 Euro Millions By Business Area By Geography 100% = 5, % = 5,159 Telecom 10% Other 1 3% Utilities APAC Latin America 9% 37% 9% Industrial 15% North America 13% 35% 69% Energy 90% Trade & Installers Total Energy: 4,626 Total Telecom: 533 EMEA By Customer Largest single customer: <3% of total sales By Country Largest single country within EMEA: France, <12% of sales ¹ Other includes mainly Wire Rod business, closed at the end of

5 Clear Segmentation Strategy Focused on High Value-Added Products PROFITABILITY High Network Components Global businesses Extra HV Submarine Look for Profitable Growth Focus on products and service Limited product diversification within regions Regional competition Medium Low Copper Telecom Cables Businesses with a strong local focus Power Distribution Trade & Installers VALUE ADDED Optical Cables & Fibre Industrial High Voltage Businesses with a strong continental integration Focus on solutions Diversification and innovation Competition on a global basis Take selective M&A opportunities Manage for Cash Low Medium High GROWTH Research Innovation & Product Development Operations Purchasing Logistics Product engineering driven by customer needs Telecom: innovative fibres and products Continuous efficiencies on variable costs: reducing labour costs, minimizing waste and reducing per unit raw material costs Tight centralized control on strategic materials Excellence in customer service: reliability and speed 4

6 To Benefit From Expected Solid Volume Growth Across End- Markets Energy Cables Reference Market Million Tons Conductor 12 8,2 8,6 9,1 9,4 9,8 10,1 10,5 10 6,5 6,7 6,9 7,1 7,4 7,7 8 6 CAGR: 3.6% 4 CAGR: 4.3% E 2008E 2009E 2010E Historically low correlation with economic cycle Growth driven by: Investments in power grid interconnections Investments in power transmission and distribution Infrastructure investments Telecom Cables Reference Market Optical Cables Million Km Fibre CAGR: 12.8% Market growth driven by increased investment in fibre access networks (FTTx) E 2008E 2009E CAGR: 7.3% 2010E Copper Cables Million Km Pair CAGR: (2.3)% Demand supported by investments in emerging markets Source: CRU data, April Energy = Low Voltage and Power Cable; TLC = External Copper Tlc Cable, Singlemode Fibre Optic, Multimode Fibre Optic. For Optical cable producers E E 2009E 2010E CAGR: 0.4% 5

7 Key Financials Euro Millions, % of Sales Sales Adjusted EBITDA 1 Adjusted EBIT %* %* ,475** M06 * Organic Growth ** Like for like excl. UK ROD business Net Working Capital 9M06 9M06 6.1% 7.1% 8.1% 9.5% 8.6% 10.5% 3.2% 4.6% 6.6% 8.2% 7.0% 9.2% Net Financial Position M % 8.8% 13.0% 13.1% M06 ¹ EBITDA and EBIT adjusted excluding non-recurring items. 6

8 Agenda Company Overview Financials Outlook Appendix 7

9 Profit and Loss Statement Euro Millions 9M M 2007 F Y 2006 Sales 3,725 3,877 5,007 YoY total growth 4.1% 33.8% YoY like for like growth % 33.8% YoY organic growth 8.2% 9.3% Contribution Margin % on sales 16.6% 18.7% 16.5% Fixed Costs and Others (Excl.Non recurring items) (300) (321) (420) Non recurring items 3 (19) 34 (36) EBITDA % on sales 8.1% 11.3% 7.4% Adjusted EBITDA % on sales 8.6% 10.5% 8.1% EBIT % on sales 6.1% 10.1% 5.2% Non recurring items (34) 34 (72) Adjusted EBIT % on sales 7.0% 9.2% 6.6% Financial charges 4 (66) (76) (110) EBT % on sales 4.4% 8.1% 2.9% Taxes (66) (76) (56) % on EBT 40.7% 24.2% 38.2% Net income Net income attributable to the Group Adjusted for closing of UK ROD business in December 2006 ( 250m of sales in 9M 2006) 2 Defined as: Adjusted EBITDA + Fixed costs 3 Including in Q2 39m profit from Purchase Price Adjustment with Pirelli 4 Including in Q Bank Fees write-off equal to 59m 8

10 Sales Drivers Vs Third Parties Euro Millions Total Consolidated 3, % ,877 3, M 2006 Chg. Perimeter UK ROD 9M 2006 L-for-L Organic Growth Metals Effect Exchange Rate 9M 2007 Energy Cables & Systems Division +8.5% 125 3,457 3, , M 2006 Chg. Perimeter UK ROD 9M 2006 L-for-L Organic Growth Metals Effect Exchange Rate 9M 2007 Telecom Cables & Systems Division % M 2006 Chg. Perimeter 9M 2006 L-for-L Organic Growth Metals Effect Exchange Rate 9M

11 Utilities Euro Millions, % of Sales Sales Vs Third Parties Adjusted EBITDA Adjusted EBIT %* M06 9M06 9M06 * Organic Growth 8.9% 9.9% 10.6% 11.6% 11.5% 12.9% 6.3% 7.4% 8.4% 9.9% 9.4% 11.3% Highlights POWER DISTRIBUTION HIGH VOLTAGE SUBMARINE Higher profitability due to a better geographical and product mix Introduction of New technology P-Laser cable to further improve profitability in the medium term Significant industrial efficiencies New contracts awarded in key markets (USA, UK, China) Double digit growth driven by 12M order book New High and Extra-High Voltage production facility in the strategic US market by H109 Market outlook remain strong Major new projects awarded: Cometa, Transbay Growing demand in Off-shore wind farms Capacity increase completed High visibility thanks to growing order book 10

12 Trade & Installers Euro Millions, % of Sales Sales Vs Third Parties Adjusted EBITDA Adjusted EBIT %* * Organic Growth 9M06 9M06 9M06 3.9% 5.2% 7.2% 8.7% 6.6% 8.6% 1.7% 3.2% 6.1% 7.8% 5.5% 7.7% Highlights Selective growth and strong focus on geographical and product mix improvement Significant improvement in profitability confirmed due to: Strong performance in high profitable European and Extra-European countries Double digit growth in LSOH, Fire Performance High geographical diversification Marginal exposure to US construction market 11

13 Industrial Euro Millions, % of Sales Sales Vs Third Parties Adjusted EBITDA Adjusted EBIT %* * Organic Growth 9M06 9M06 9M06 7.6% 8.0% 7.2% 8.6% 8.7% 10.2% 4.4% 5.1% 5.3% 6.9% 6.9% 8.5% Highlights Strengthened market share in all strategic business segments: Strong performance in OGP (esp. China, Italy) with a strong focus on deepwater installations (Umbilicals in Brazil) Renewable energies: buoyant global demand in wind power (esp. Spain, China) Positive development in the highly profitable Crane business (esp. Italy, Germany) Significant growth in Mining confirmed (esp. Australia) High profitability increase driven by better business mix and leverage 12

14 Telecom Division Euro Millions, % of Sales Sales Vs Third Parties Adjusted EBITDA Adjusted EBIT %* (9) 1 * Organic Growth 9M06 9M06 9M06 3.6% 4.4% 7.2% 7.7% 8.4% 8.4% n.m. 0.3% 6.6% 6.8% 7.8% 7.8% Highlights Optical cables: Lower market demand in USA impacting sales growth and profitability Growing demand in EMEA confirmed Increasing presence in APAC Renewal of multi-year agreement with Telstra in Australia Strengthening leadership in aerial cables growing market (esp. emerging countries) Price still under pressure Copper cables: Keep focus on product mix improvement (XDSL) Increase customer base in Emerging markets 13

15 Balance Sheet Euro Millions 9M M 2007 F Y 2006 Net fixed assets Net working capital NWC as % on sales 13.0% 13.1% 8.8% Provisions (175) (138) (140) Net Capital Employed 1,379 1,410 1,177 Employee provisions Shareholders' equity of which attributable to minority interest Net financial position 1 1, Debt Shareholders Loans Bank Fees (73) (22) (63) Net financial position vs Third Parties 1, Total Financing and Equity 1,379 1,410 1,177 14

16 Cash Flow Euro Millions 9M M 2007 F Y 2006 LTM 9M 2007 EBITDA Price adjustment - (39) - (39) Gains/losses on disposals (1) (2) (8) (9) Net Change in provisions 3 (1) (3) (8) Cash flow from operations (before WC changes) Working Capital changes (194) (196) Paid Income Taxes (50) (68) (56) (74) Cash flow from operations Price adjustment Net CAPEX 1 (28) (46) (69) (86) Free Cash Flow (unlevered) Financial charges (67) (65) (112) (110) Free Cash Flow (levered) (35) Reserves distribution (90) - (90) - Shareholders Loan (Equity component) (51) (28) (51) (28) Net Cash flow (176) Net financial position at the beginning of the period (892) (879) (892) (1,071) Net cash flow (176) Other variations (3) (53) (11) (62) Net financial position at the end of the period (1,071) (899) (879) (899) 1 Not including movements of the item Securities held for trading (included in Net Financial Position) 15

17 Agenda Company Overview Financials Outlook Appendix 16

18 2007 Outlook Positive market outlook expected to continue Consolidate solid organic sales growth Maintain positive trends in Utilities and Industrial FY Adj.EBITDA: confirmed well in excess of 500m Continuous strong cash conversion 17