Prysmian S.P.A. Ord

thank you good morning and welcome to the first half 25 result call i'm very excited to show the results achieved in quarter 225 about the 600 million this set A new record for the company to be done. The last best quarter was quarter 24, the first quarter after the consolidation anchor wire, 540, but 605 is definitely an outstanding performance. That is beaten in our performance. the past results. It is true there is some 10 million plus from channel perimeter change, but there is also an adverse forex impact in our quarter 2025 results versus the previous 540 of quarter 2024. Amazing is the 14.3% in margins, indicating a significant accretion of margin across all business segments, transmission, power grid, but also INC and digital solutions. uh the the uh organic growth in the first alpha posted a nice four percent which is basically coming across all the summit of business one billion is the frequency of the last four months confirming that we are solid in delivering the frequency of guidance that by the way we updated for the full year to be noted the faster consolidation of channeling of perimeter from June, only two, less than two months after the signing, and also on the CO2 emission and the energy targeting. We see later a significant reduction of CO2 emission in scope one and two versus 2019 of 30%, heading for a 40% for the full year scope. Moving to some achievements. I think we never celebrate our achievements. Here we want to make sure that we all understand that not only are we focusing on the results, on the company improvement, on the growth, we are also setting the foundation for the future opportunity for growth. There are, in the first packet of comments, achievement in the different segment of business in the blue front, Mona Lisa and Piccola Crystalline, so an important milestone in confirming our in delivering this functional capacity both manufacturing and installation on time and on cost. Several agreements in power grid space. Stargate data center, a larger project adjudicated to us in U.S. for a Texan project in terms of electrification cables and also digital solution cables. And very important, the consolidation and expansion of connectivity space within Prismian, leveraging Channel and Warren Brown. But I'm much more proud of what is underneath. A lot of innovations. The first cables 245 for dynamic solution for floating wind offshore platform. A solution for connecting the substation to the grid with a medium voltage plug and play cables with connectorized edges. Fire resistant range of products, new range of products for the U.S. And probably the most striking one is the hollow core fiber technology. We partnered with a startup in U.S., the developer solution. We are industrializing it. This will allow to produce and sell cables, fiber optical cables, whose core is empty, is void, so that the light data are transferred at a higher speed in air than in glass, allowing the data center to be spread over the territory without insisting on the same power grid. So making the data center's function facilitated. So these innovations are key. to confirm our leadership in technological space and supporting the growth of the company in the coming years. Let me move now to the individual business. Transmission is the star of this first half. I'd like to comment on the first half result, 250 million EBITDA for the full first half versus 150 last year, so 100 million more in the same period. with an important and significant growth in EBITDA margin from 14% to 17%. This again remarks the solidity of this business, remarks our confidence in achieving the 18% to 20% target in margins by 2028 as per our capital market day. And with 250 million per semester, we see the journey to 1 billion gold by 2028, 1 billion gold EBITDA, within reach, thanks to the solid expansion of the capacity and thanks to the solid execution of the project of better margin that we have in our backlog. In power grid, we are also happy to confirm stability of margins. Infine margin had gone up. 15.6% EBITDA margin in quarter two is higher than what we reported for quarter one, 25. The growth is substantial, 5%, leveraging the capacity that we unlocked towards the end of 2024, and signaling that the market demand in the U.S. in terms of grid enhancement is pretty strong and solid, and driven by solid secular trends. INC, also in INC quarter 2, you see the significant jump in EBITDA margin, indicating the highly accretive contribution of AnchorWire to the performance of the INC business in the US and in the entire group. 10.6% of the reported numbers for 2024 quarter 2, Overall, year-over-year is at 14.1% this year, with a significant improvement over last year. The growth was not seen certainly significant in this quarter too, but you know the environment is pretty bumpy, and our focus is on profitability. We didn't lose market share, actually grown market share thanks to our solid service level coming from AnchorWire. Quarter two last year was particularly stronger. We really want to focus on service and profitability and maintain our leadership in the market in terms of setting prices in the U.S. market. Specialties, we have some organic growth, not bad, dividend margins not yet at the level of the steel, we are still suffering from the softening that we see in the automotive space, We are close to finally disposing the last two factors that we want to get rid of in the automotive space. This will happen before the end of quarter three. We also had a negative impact coming from exchange rate, but more importantly coming from a softening in the residential innovative business in the US. All the rest is solid driven by significant amount of projects across all the verticals, shipyards, defense, fire-resistant products, and crane and mining and so on. Digital reflects the benefit of the perimeter change, twofold, the EBITDA margin, surged from 13.3% last year to 16.8% and this account only from one month out of three where we consolidated a channel that namely was June and the 20 million improvement in EBITDA partly come from channel for more than 10 million plus per June month and the rest is the organic growth of the company masternated channel is outperforming our expectation as we've seen market rebounding in the favor to the old cable business in u.s channel is enjoying a significant rebound in volume and also profitability in the connectivity space in u.s the combination of the two will make us a stronger provider of favor to the old solution to this market with exposure also to the data center esg uh kpis a rather common set the two on the top right side of the page 44 is a big share of the total revenue which is linked which is associated to sustainable solutions or recycled content or material products whose carbon footprint is low uh products that can enhance our position in terms of uh supporting customers to us their goals in making them uh allowing them to achieve the sustainability goals. Remarkable is also the 19.9, the 20% of recycled content in our product. This is driven, paradoxically, by the tariff. The U.S. market had an excess of waste of copper available. China that used to buy this waste didn't buy it because of the additional cost. ANCO, we took immediately the opportunity. ANCO recycled up to 30-40% of waste into the virgin material in the McKinney facility. So ANCO has proven to be taking advantage of the cost benefit of your recycling waste, but also taking advantage of the recyclability part, the energy part of this topic. Let me hand over to Francesco for more financial insights into the P&L and the free cash flow.

Thank you Massimo, and good morning to everybody. A very robust set of half one results as Massimo anticipated. Revenues not far from the 10 billion level, 9.6 billion in the first half and the first half organic growth at 4%. recapping the main messages on growth, certainly a very strong transmission business, where the growth confirmed the strength that we had already seen in the first quarter. A nice improvement in terms of growth in the power grid business, both in Europe and in North America, I would say. Good growth also organic in digital solution with particularly strong North America. And also definitely an improvement in terms of sequential improvement at least in the electrification, namely in the INC. where we posted some good growth compared to the first quarter. So, all in all, 4%. I think even better in terms of EBITDA performance. Massimo anticipated a record second quarter at 605 with margins at constant at standard metal price at 14.5% and also half year you see the accretion at standard metal price is very significant from 12.6% to 13.8% plus 1.2% is an accretion which is mainly driven by transmission which is achieving already in the first half the 17% level in terms of ebda margin but also power grid with margin staying stable actually even slightly improving at a very good and very high level and of course is an accretion which is also benefiting of the significant changes of perimeter that we benefit of in this first half the anchor wire consolidation of course compared to the first half 2024 and last but not least the fast and quick closing we have on the channel acquisition, which is starting to contribute and to enhance our profitability quite nicely in the month of June, since the month of June, and which will be a definitely better upside on the digital solution in terms of margin for the second half. Below the line, below the adjusted BDA line, very few comments. Basically, neutral adjustments, 2 million. benefiting from the gains that we realized on the 8% stake that we have so far of YSE. These 8%, by the way, excludes the further 5.5% that we disposed of in July. Of course, the cutoff date is end of June. We have definitely a level of financial charges at 145 million, which reflects the new perimeter. It is substantially in line with our expectation and tax rate in line with the 27% that we were anticipating at the capital market day. All in all, this results in a very strong boost on our group net income. You remember that the first quarter reached 150, this means the second quarter at 276 million, giving the 426 million year-to-date June. I think we are very well set to achieve the first year of our four-year plan for growth growth, which is, I'm sure you remember, a metric that we were setting, a very important metric we were setting in New York. And you remember that we were setting a range for the four-year in between 15% and 19% CAGR. And I'm very confident that in this first year of the four-year, we may even achieve this. We may even exceed this range with an EPS growth, which, in my opinion, will be higher than 20%. Let me now flip to the very solid cash flow delivery that we had in the last 12 months, solid and pretty much stable at the level of $1 billion compared to Q1, last 12 months, and also the full year, 2024. This is even more solid if we think that in this $979 million we discounted pretty much a peak in terms of CapEx. You see this 940 million. This very high level of CapEx will progressively decrease on full year base to the level that we have already anticipated to you of approximately 740-750 million. For the simple reason that this year CapEx are distributed much more heavenly, much more linearly. than last year. And this will drive our cash flow up towards the new level of guidance that we have decided to upgrade and that Massimo will comment in a while. Let me maybe remark here that you see that this is a bridge of debt from June last year to June this year. And you see the accounting treatment of the hybrid bond. You see the cash inflow close to $1,989,000,000 net of some transaction costs. This means that IFRS, as I'm sure you are aware, the hybrid bond is treated as equity. So basically it's a reduction to our debt. This is, of course, a different treatment than the view that, for instance, the rating agencies is having where half, 50% of the hybrid bond is treated as debt. Just to clarify the accounting treatment, which may be not so easy or not so simple for you to understand. Excellent. I think I'm over and I ended back to Massimo.

Thank you, Francesco. Let me move to the guidance and let's draw your attention to the chart on the right-hand side of the page. You see how we built it. It's a starting point. The previous guidance was set at 2.3 billion euros plus minus 50 million. We are happy to upgrade the premium perimeter guidance by a number that you can figure out is 40 million. And then there is the perimeter threat added on top, unfortunately offset in our assumption by the Forex. As I said before, we are happy about the performance of the channel. The consolidation of June is extremely accretive to the group. And the trend of the bid that we see in the coming months is comforting us on this important position for the American perimeter, for the US telecom space set, and giving us a significant upside. Forex, maybe we've been too cautious on this assumption, but we think that was the right way to define the new guidance with a possible offset between China and Forex. Said this, I mean, today, after having seen last night changes in the tariff system of the U.S., whereby now the 50% that was expected to be applicable to copper, cathode and rod imports from all the other countries, from overseas, and only to raw material and not to derivatives, to finish products, after what happened last night, whereby the tariffs are going to be applied to rod only and not to cathode, But also to all cables imported from overseas, I must say that I feel much stronger today for what this guidance is expected to deliver for 24, for 25, and also I would like to say that I see upside coming for the new tariff system. Also in light of the possibility that the same approach that has been set for copper will be also applied to aluminum, where for the time being we have only tariff applied to aluminum. raw material and not to product, finished product imported from overseas. So we feel much more relieved. We feel that administration is taking the right decision to finally protect and preserve local jobs and growth of U.S.-based manufacturers And we are one of them. 99.5% of what we sell in the U.S. is produced locally. And finally, this will do justice to our investment in the U.S.-based territory. We have also upgraded the frequency flow guidance from the 1 billion mark minus 50 plus 50 to 1 billion minimum, 1 billion 75 max range, 1 billion and 40 midpoint. So moving to the closing remarks, I'd like to confirm the positive and outstanding performance delivered by all segment of business in Quarter 2. Also INC that posted some negative growth versus Quarter 2 last year, in reality has grown by 5.4% in Quarter 2, 25 over Quarter 1. So sequentially there's been a significant growth and uh and and implementing a bit of margin you know you see north america um the margin expansion across all segments the one million level of repair show confirmed and uh the upgraded guidance um set an important milestone for us in confirming that the targets that we set for 2028 in New York a few months ago are within reach, and possibly we might see some upside. So the 2.3 billion, 2 billion, 340 million EBITDA paves the way for the 3 billion, 3.1 billion level of target for 2028. The 1 billion plus trickle-throw of this year is in line with what we want to achieve by 2026, 2028 with 1.6 billion trickle-throw. APS, in fact, actually has already the target of CERPO 2028 and the innovation that I showed you in this second page of the presentation highlights how important it is to move towards solutions in order to strengthen our portfolio and our customer relationship and our opportunity for growth. So thank you for this preliminary presentation. I'll leave the floor to your questions.