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Quarterly Overview
The H1 results released by
Prysmian Group were ahead of
market expectations both in terms
of organic growth and business
trends, as well as in terms of cash
generation.
The areas of particular attention
by major brokers were the
sustainability of the growth
in the Submarine and Telecom
business, considering the strong
performance the two businesses
are recording. Some analysts
were expecting an upgrade of the
guidance, even excluding WL,
on the back of the strong results,
considering that the consensus
was already positioned in the
upper side of the guidance range:
600 mln € before the revision of
the WL estimates.
In detail, among brokers that
assigned a rating, Credit Suisse
confirmed its Outperform and
raised the target to23€/share from
21, Bofa Merril Lynch reiterated
its Buy with a 23 €/share target,
Barclays and Morgan Stanley both
confirmed their Overweight, Citi
and Banca Akros confirmed their
Buy, with a target at 22.6 €/share
and 23.5 €/share respectively, JP
Morgan reiterated its Neutral but
increased the target to 20.5 €/
share, Equita maintaned its Hold
while increasing the target to 23
€/share, while Kepler-Cheuvreux
confirmed the Hold rating with
target increased to 22.5 €/share.
Mediobanca changed its rating
toNeutral from Outperform with a
target at 21,8 €/share while Exane
rating was Sell with a target raised
to 18.5 €/share.
Ratings positive
targets raised
T
he
macro
environment
continued to show signs
of stabilisation and slight
improvement in Europe, while
remaining solid in the US. However,
persisting geopolitical tensions in the
Middle East and Russia, together with
the slowdown in some economies, such
as China and Brazil, continue to raise
doubts over the short and medium-term.
In this economic context, the Group’s
expectation is that demand in the cyclical
businesses of medium voltage cables will
record a slight recovery, while in the
Energy Projects the improving trend and
potential growth in the Submarine and
SURF businesses are confirmed.
The response to the problems which
emerged during the Western Link project
is proceeding better than expected,
enabling a faster execution schedule.
Thanks to the actions taken, along
with the strengthening of contractual
guarantees and longer project timing
agreed with the customer, the overall
result in terms of Adjusted EBITDA is
expected to improve by €35 million,
reducing the negative impact from €167
million originally estimated to €132
million. Western Link is thus forecast
to have a negative impact on 2015 Adj.
EBITDA of €26 million compared with
the original estimate of €56 million.
Exchange rates, which had an adverse
impact of about €14 million on Adj.
EBITDA in FY 2014, are forecast to have a
positive impact on the FY 2015. Based on
the existing order book and considering
the factors mentioned above, the Group is
forecasting Adjusted EBITDA for FY 2015
in the range of €590–640 million (€616–
666 million excluding WL), marking a
significant improvement on the €509
million reported in 2014.
Upbeat guidance for FY 2015
confirmed, WL negative impact
on Adj. EBITDA slashed