Prysmian S.p.a. Results at 31 December 2018

categories: Financial Press Release  Corporate 

Milan, Italy   -   17/04/2019 - 04:37 PM

Combined sales (including General Cable for full year 2018) at €11,524M with +2.8% organic growth

Adjusted combined EBITDA (including General Cable for full year 2018) at €767M including WL Project provisions totalling €165M FY 2018

Reported adjusted ebitda (including General Cable for the 7 months from June to December 2018) at 693M, of which €123M attributable to General Cable

Net Financial Debt confirmed at €2,222m (€436M at 31/12/2017), including €2,601M attributable to the acquisition of General Cable

FY19 Guidance confirmed, adjusted combined EBITDA expected to grow in the range of €950M-€1,020M

FY 2019 Free Cash Flows forecast confirmed at €300M ±10% after payment of €90M restructuring costs

Proposed dividend pay-out of €0.43 per share confirmed

 

The Board of Directors of Prysmian S.p.A. met today and re-examined and approved the consolidated financial statements and draft separate financial statements for 2018.

 

WesternLink submarine interconnection

On 6 April 2019, a fault was detected on the WesternLink submarine interconnection that caused the Link to be out of operation. Investigation work located the fault, which took place during the commissioning tests, in the offshore portion of the cable. In light of this further issue and based on the technicians’ analysis, the Board of Directors decided to allocate a €70 million provision. The allocation takes into account the contractual penalties and the repair and ancillary costs associated with the issue which occurred on 6 April 2019, as well as additional repairs that might be necessary in the foreseeable future.  

 

Compensation claims for anti-competitive damages

Between the end of March and the beginning of April 2019, some Group companies received compensation claims for damages by certain customers as a result of the European Commission’s decision dated April 2014 on alleged anti-competitive behaviours in the land and submarine HV cable market. Based also on the advice of its legal experts, the Board of Directors decided to allocate a €25 million provision.

Main consolidated financial results impacted by the aforementioned events and diverging from the results reported on 5 March 2019

  • Group’s sales decreased by €53 million, wholly attributable to the Projects operating segment, due to the WesternLink project provisions. On the basis of this change, organic growth was 2.8% (compared to 3.3% reported on 5 March).
  • Revenues of the Projects operating segment decreased by €53 million, with a +1.7% organic growth (compared to 4.7% reported on 5 March).
  • Adjusted EBITDA decreased by €70 million, wholly attributable to the Projects operating segment, due to the WesternLink project provisions.
  • EBITDA declined by €95 million, of which €70 million attributable to the WesternLink project provisions and €25 million to the provisions for anti-competitive issues.
  • Net profit decreased by €72 million to €58 million as a consequence of the foregoing and taking into account the related tax effects.
  • Net Capital Employed and equity decreased by €72 million.
  • Net Financial Debt and free cash flow remained unchanged.

Net profit of the Parent Company Prysmian S.p.A. declined by €4 million to €96 million due to the effects arising from the Italian companies’ tax consolidation.

(*) The consolidated financial statements and draft separate financial statements are currently being audited; as of today’s date, audit is still underway.

Further Board of Directors’ resolutions

 

Notice of Calling of Annual General Meeting
The Board of Directors has vested the Chairman of the Board of Directors and the Chief Executive Officer with powers to severally call the Annual General Meeting (AGM) for Wednesday, 5 June 2019, in single call. Based on the results for 2018, the Board of Directors will recommend to the forthcoming AGM that a dividend of €0.43 per share be distributed, involving a total pay-out of approximately €113 million.
If approved, the dividend will be paid out from 26 June 2019, with record date on 25 June 2019 and ex-dividend date on 24 June 2019.
 
Motion to confirm a Director’s appointment
Prysmian’s Board of Directors has also resolved to submit to the forthcoming AGM the proposal to confirm as Director Francesco Gori, who was co-opted on 18 September 2018 following Director Massimo Tononi’s resignation.
 
Share buy-back plan
The Board of Directors decided to submit to the forthcoming AGM a request for the authorisation to buy back and dispose of treasury shares, after revocation of the previous resolution approved by the AGM on 12 April 2018.
The total number of shares that can be purchased, in one or more tranches, cannot exceed the 10% of the share capital. On the basis of the current share capital, the total number of shares that the Company can hold amounts to 26,814,425, including the shares that the Company already holds directly and/or indirectly (5,096,883).
Treasury shares may be purchased within the limits of available reserves recognised from time to time in the most recently approved annual financial statements.
The plan has a maximum term of 18 months, commencing from the date of authorisation by the AGM.
 
The said authorisation will be requested to:
 
  • create the Company’s portfolio of treasury shares (so-called “stock of shares”), including those already held by the Company, that can be used in any extraordinary transactions (e.g., mergers, de-mergers, purchase of equity investments);
  • use the treasury shares acquired by exercising the rights ensuing from debt instruments, whether convertible or exchangeable for financial instruments issued by the Company, its subsidiaries or third-parties (e.g., takeover bids and/or share swaps);
  • dispose of own shares in service of share-based incentive plans or share ownership plans reserved for Prysmian Group’s directors and/or employees;
  • ensure effective management of the Company’s share capital, by creating investment opportunities also on the basis of available liquidity.
 
The buy-back and disposal of treasury shares will be performed in compliance with applicable laws and regulations in force:
i.   at a minimum price of no more than 10% below the stock’s official price during the trading session on the day before each transaction is undertaken;
ii. at a maximum price of no more than 10% above the stock’s official price during the trading session on the day before each individual transaction is undertaken.
 
At 17 April 2019, Prysmian S.p.A. directly and indirectly holds 5,096,883 treasury shares.
 
All relevant documentation required under applicable regulations will be made available to Shareholders and the public in the manner and within the terms set forth by applicable laws and regulations.
 
Long incentive plan amendments
The Board of Directors decided not to submit to the Shareholders’ Meeting any proposal to amend the long-term incentive plan currently in force.
 

2018 Non-Financial Statement (Sustainability Report)  

The Board of Directors approved the Consolidated Non-Financial Statement (NFS) pursuant to Legislative Decree No. 254/16, incorporating the impacts emerged in the re-examination of the consolidated financial statements and draft separate financial statements for 2018, following the recent developments regarding the WesternLink submarine interconnection and the compensation claims received for anti-competitive damages.

Including General Cable’s contribution, the economic value generated by Prysmian Group was €10,240 million, down €53 million compared to €10,293 million reported on 5 March 2019, as a result of the decrease in Group’s sales from €10,158 million to €10,105 million.

Prysmian Group’s Financial Report at 31 December 2018, approved by the Board of Directors today, will be made available to the public by 30 April 2019 at the Company’s registered office in Via Chiese 6, Milan, and at Borsa Italiana S.p.A. It will also be available as of today on the corporate website at www.prysmian.com and in the authorised central storage mechanism used by the Company at www.emarketstorage.com. This document may contain forward-looking statements relating to future events and future operating, economic and financial results of the Prysmian Group. By their nature, forward-looking statements involve risk and uncertainty because they depend on the occurrence of future events and circumstances. Therefore, actual results may differ materially from those reflected in forward-looking statements due to a variety of factors. The managers responsible for preparing corporate accounting documents (Carlo Soprano and Alessandro Brunetti) hereby declare, pursuant to Article 154-bis paragraph 2 of Italy's Unified Financial Act, that the accounting information contained in this press release corresponds to the underlying documents, accounting books and records.

 

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MEDIA & INVESTOR RELATIONS

Maria Cristina Bifulco

Maria Cristina Bifulco

Chief Investor Relations, Sustainability and Communication Officer