Solid sales and strong margins improvement

SIGNIFICANT FY 2023 GUIDANCE UPGRADE:

+ €175 MLN ADJUSTED EBITDA AND + €100 MLN FCF

NEW TARGETS:

• ADJUSTED EBITDA AT €1,575-€1,675M
• FREE CASH FLOW AT €550-650M

CAPITAL MARKET DAY ON 5 OCTOBER 2023

• SALES AT €8,003M, ORGANIC GROWTH AT +4.8%
• ADJUSTED EBITDA UP TO €878M (+25.6% VS 1H 2022) MARGINS SHARPLY UP TO 11.0% VS 8.8% IN 1H 2022
• GROUP NET PROFIT INCREASE TO €405M (+56.4%)
• STRONG CASH GENERATION WITH LTM FREE CASH FLOW AT €567M

FOCUS ON THE BUSINESSES

• PROJECTS: SALES AND MARGINS ON THE RISE (ORGANIC GROWTH AT +23.5%; MARGINS AT 11.0%). €5.4 BN ORDERS RECEIVED YTD
• ENERGY: ORGANIC GROWTH DRIVEN BY GRID HARDENING AND RENEWABLES (+3.4%)
• TELECOM: VOLUME SLOWDOWN (ORGANIC GROWTH AT -5.2%), RESILIENT MARGINS (14.8%)

CO₂ EMISSIONS (SCOPE 1&2) -9.8% VS 1H 2022. NEW TARGETS APPROVED BY SBTI

INVESTMENT GRADE RATING ASSIGNED BY S&P GLOBAL RATINGS

The Board of Directors of Prysmian S.p.A. approved today the Group’s consolidated results for the first half of 2023 ³ .

“Sales growth and, above all, the significant profitability improvement for the first half of 2023 are mainly attributable to our well-balanced business portfolio, both in terms of products offered and geographies,” stated CEO Valerio Battista. “The Group also confirmed its ability to seize the opportunities offered by the energy transition and electrification processes, which require power transmission and distribution grid hardening and development. Worth of mention is also the strong growth of cash flows from positive business performance and profitability. This allows the Group to support its investments and consolidate its leadership and competitive advantage, at a time when our sector plays an increasingly central and strategic role. The nearly €5.4 billion new orders acquired in the first half of the year clearly confirm the trust that the market places in us. In light of all of the above, we significantly upgrade our guidance for full year 2023" Battista concluded.

FINANCIAL HIGHLIGHTS

Group sales amounted to €8,003 million, with a +4.8% organic growth compared to 1H 2022. The significant execution progress in the offshore wind farm interconnection and cabling projects underway led to a marked 1H 2023 acceleration of the Projects business’ organic growth (+23.5%). Organic growth of sales of the Energy Business (+3.4%) was driven by utilities’ urgent focus on grid hardening and the increasing demand for wind turbine and solar panel cables. Telecom volumes slowed mainly due to the decline in the American market (-5.2%).

Adjusted EBITDA rose by +25.6% to €878 million, with the ratio to Sales significantly improving to 11.0% compared to 8.8% for 1H 2022. The Projects business chiefly benefited from the most profitable mix of projects that entered their execution phase in 1H 2023 (Adjusted EBITDA margin at 11.0%). In the Energy business, the strong demand for Power Distribution and Renewables cables allowed the Group to support the price levels with an ensuing profitability benefit (Adjusted EBITDA margin at 10.4%). With regard to Telecom, the Group’s profitability remained substantially stable in 1H 2023 (Adjusted EBITDA margin at 14.8%), despite a volume slowdown mainly due to the slowdown in the North American market.

EBITDA grew to €828 million (€665 million in 1H 2022) including net expenses for company reorganisations, net non-recurring expenses and other net non-operating expenses totalling €50 million (€34 million in 1H 2022).

Operating Income increased to €636 million compared to €423 million in 1H 2022, while Net Profit attributable to owners of the parent rose to €405 million compared to €259 million for the same period of 2022 (+56.4%).

Net Financial Debt declined to €2,065 million at the end of June 2023 (€2,330 million at 30 June 2022).

The Group proved to be able to translate the sharp profitability increase into cash flows, recording a Free Cash Flow by €567 million in the past 12 months, excluding the proceeds from the sale of a portion of the shares allotted to employees following the execution of the 2020-2022 LTI Plan, to cover their tax obligations amounting to €132 million (sell-to-cover option). Net operating cash flows do not include €3 million outflows relating to acquisitions and €45 million outflows for antitrust-related issues.

Cash flows were positive by €567 million thanks to:

• €1,603 million operating cash flows before changes in net working capital;
• €160 million cash flows absorbed by the increasing net working capital;
• €498 million cash outflows in net capital investments;
• €327 million taxes paid;
• €61 million net finance expense;
• €10 million dividends received from associates.

¹Excluding cash flows due to acquisitions, antitrust-related impacts and proceeds from the sale of a portion of the shares allotted to employees following the execution of the 2020-2022 LTI Plan, to cover their tax obligations (sell-to-cover option).

²Including also the EGL1 and EGL2 projects, for which the Group was selected as preferred bidder and finalised agreements worth a total of €265 million to assure its production capacity.

³The Half-year Financial Report is subject to limited audit, which is still underway as of today’s date.

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