Prysmian S.P.A. Ord

Welcome all, and thank you for taking your time to attend the call for 2025 for your result. I would like to highlight the 25. You see a record results across all KPIs, strong performance in EBITDA with 2.4 billion, which is itself a 500 million growth in terms of the EBITDA over the 24 performance. A strong net income, 1.3 billion, of course, supported by the disposal of the YEC share, but still remain an outstanding net income result. And a cash generation with a 50% conversion feasibility. 1.2 billion, again, record result in free cash flow generation. Even the margin grows over 2024. To appreciate it, I will We wait for the next slide. And from growth EPS, also with 18%, which is well above the range that we committed to achieving at the capital market rate, that was 15 slash 70%. And we'll jump to the next one to deploy, to display the scenic account Acceleration in our performance. You see stability with slight growth in 22, 23. Then the first step up, 1.9 billion EBITDA and 2.4 billion this year. This 500 million is a significant hike in EBITDA. mainly coming from perimeter change, the full recognition of anchor wire impact in 2025, the new acquisition channel, and the strongest EVA performance that comes from transmission with 200 million growth in EBITDA. To be honest, there is another 80 million benefit in terms of organic growth in the 2025 result that is hidden by the Forex that was 80 million, 75 million to be specific adverse in 25-24. I will not comment on the guidance now, but you see that 2.7 already positioned us, I would say, slightly ahead of what is the target that we have to achieve by 2028, considering that we still have two years to go. Freakish flow, similar trend, significant acceleration. 1.2 billion is a very good conversion rate for the economy. 1.350 is again another step up. This definitely positions us ahead of the target of 2028. Let me move to the important contributors to the growth of the company in the last 18 months. This is an 18-month worth of effort in reshaping our portfolio. making it more suited to our goal of becoming a stronger solution provider. It's seen 24 in electrification anchor wire give us the access to electrification space in the United States and tested that access. Now we have a unique asset and unique opportunity to leverage the expansion of the center. We followed this with the digital solution expansion portfolio with connectivity with Warren Brown in 24 in Asia Park, and Channel in the U.S., and also Palsari in the U.S. And lately, we had this two important acquisitions with Dosmall, the XTERRA, and the SCSM still give us access to the submarine telecom long-distance connection, helping us complement the strength that we have in the submarine energy business with submarine telecom opportunities. SCSM is, again, an important step up in verticalizing our capabilities and is also one of the most critical phase of the execution of the project, the survey assessment and the rule preparation. which will help us become more efficient on the one hand, but also able to sustain the possible risk that comes from the burial depth that always rely on customer survey and not on survey. We also work on our portfolio in terms of disposing shares of YMC, which is not considered any longer a crucial asset for us. And we made a couple of, actually, three-factor reduction in the automotive perimeter to help us avoid evolution coming from the difficult time that automotive is living worldwide. There are also standing remarkable achievement on the sustainability journey. Our newly defined target is to move to sustainability-linked revenues, so revenues that are associated to low-carbon products, sustainable solution. 44 is the target, is the achievement for 25. Our target for 28 that we declare that is 55%. 11, 12 billion revenues in 28, and who knows whether this will be 11 or 12 or more, depending on the perimeter change, with these solutions that can offer benefit to our customers in terms of sustainability, significantly hiking the recycled content from 16 to 21%, and we continue our consistent journey of reducing scope 1, 2, and 3 to achieve and meet our commitment to be net zero by 2035. We are also particularly proud of this record 50% achievement in a share of our employees, the old shares in the company, which is a sign of consistent and growing confidence in the future of our company. Let me start with the start of 25. There are many KPIs, but I will draw your attention to the right-hand side of the page, 30% organic growth, which equates to almost 800 million revenues in one year in terms of capacity expansion and execution of the projects. Second, 582 million EBITDA, 220 million additional to 2024. The step increase is amazing. And third, EBITDA margin, 18.3%, fully at 25%, supported by a 21% in quarter four, explains and gives confidence and actually shows that we are going to beat the target that we set for 2028 that was set at 18-20%. We are already there in 2025 with an exit speed that goes beyond the range that we set for 2028. Amazing also the growth of the backlog, $17 billion, with $2 billion worth of projects being awarded to us They are not in the backlog because they are waiting for the not to proceed. They will come in the next few quarters. By distribution, we continue with a sustained growth. In the quarter was pretty strong, 13%. In the full year, still very strong, 8%. Certainly supported by two large regions, U.S. and North America and Europe. The EBITDA margin for the year is slightly down on 2024 because the quarter four is slightly down on the year over here on quarter four, 2024. Again, the same point that I mentioned last time. There is this Midwest spike in cost due to the tariffs, unfortunately, that we could not pass to customers in the overhead transmission space in the U.S. because this is a fixed-price business. Now we are moving to different, we try to define different solutions, but until we have flashed out the whole backlog, which was set when the Midwest was lower than this, we will suffer some contraction in the overhead transmission line that has a repercussion on the total power grid space. Electrification is showing a sluggish ILC growth overall, but with a, promising growth in quarter four in North America with almost 6% year-over-year growth, which is supported by what we see already in quarter one, 2026. So we saw for a lot in terms of organic growth in 25 in the space in North America, because the whole market, with the exclusion of data center, so the residential and the non-residential market was 6% down in 2024. These are probably number of the spend occurred in U.S. in construction business. The expectation, the outcome for 26 is much more promising in the start of the year, as well as the exit of the last month of 2025 are extremely promising. The EBITDA margin fully grew by 900 basis points over 24, and this is, again, the level and the value of the accretion due to the acquisition of Anchor Y in our perimeter, full perimeter. Specialty is nothing that was not foreseen, but it's still disappointing. We have a full year, 24 reported, $310 million to be done, and now $280 million. There is a $10 million forex and wind, of course, but besides this, there is a weaker demand in automotive, in elevator, U.S., and in oil and gas. So, contraction of margin distribution has caused this decline. let me say, 20 million organic decline. The rest is the Forex effect. The profitability fully remains pretty consistent with the past, and we We have finally disposed the asset that we want to dispose in automotive towards the beginning of this year, January and February. So we should not see any longer the dilution coming from automotive, and we hope to see the rebound of the business in the rest of the verticals that we play in the different regions. This is a solution that speaks for itself. This is a significant growth, organic, 7% full year. supported by the rebounded business in the United States with stability in Europe and other countries. And then there is the perimeter change that decided 268 million equates for more or less 100 million is the channel. You see our creative channel is with a portal impact which brought the EBITDA margin five points higher than what was 24. And overall, the EBITDA margin at 17.3 for the full year. will continue. It will also, as we did in the optical business, benefit from the rebound of the market. And now we can finally work on integration and leverage the bundling of connectivity cables and leverage the services that we'll have to achieve thanks to the cross-selling opportunity. Let me go back to Francesco for more insight into the financial details.

Thank you very much, Massimo, and good morning to everybody. I'll be quick. The profit and loss statement, as Massimo said, EBITDA closed at 2.4 billion exactly in the midpoint. Our guidance with a great margin expansion at standard metal price and expansion of 130 basis points up to 14.2%. uh driven inorganically by the full year inclusion the full year effect of the accretive anchor wire acquisition in terms of margin and also by the inclusion of channel acquisition since june 2025 organically mainly driven by the outstanding margin expansion of the transmission business On a full year base, around 400 basis points, 4 percentage points. Drawing your attention on the right part of this slide, you see the bridge of our 24 to 25 adjusted EBITDA with a total growth of close to 500 million euros, 470 million euros, despite the adverse forest effect worth 75 million euros. Business by business, transmission was the strongest part of this growth, almost 230 million, driven by an almost 30% organic growth and, as I said, an excellent margin expansion. Power grid also performed well, 24 million units. Now, of course, cleaned of the forex effect, performing very well in power distribution and in high voltage AC across all the regions, with only an adverse effect in North America over red line business. But despite this, performed a significant growth. Also, top line organically grew by around 8% on a full year basis. Electrification grew by 176 million, of which INC contributed more than 200 million, whereas specialties dropped, driven by weak oil and gas, elevator and power. As Massimo mentioned, a very promising exit speed and start of the year in the INC business in North America after the challenging first half, the first two quarters with pretty tough market conditions. Digital solution up almost 130 million. Obviously, here we benefit of the inclusion since June of the channel acquisition, but I like to stress that also organically, and mainly in the U.S., EBITDA grew significantly on a light-for-light basis. The little adverse perimeter effect of YFC, we gradually exited in the second and third quarter, and as I said, the force effect. The other outstanding achievement is obviously net income, close to 1.3 billion. Of course, this includes the gains from YSE, net of tax in the region of 345 million, but still taking out this effect, the growth from 2024 is really outstanding. And by the way, the 3.31 euro share of EPS, growing 18% since last year, that Massimo mentioned, Already mentioned, I want to be very clear, is totally cleaned of the YFC gains effect. So it's a normalized growth of our earning for sure. We can move to the cash flow generation and one more outstanding achievement of this 2025, close to 1.2 billion free cash flow generation. This was also benefiting of some extraordinary low level of paid taxes in U.S., benefiting of a couple of positive one-off effects. But as you see, we perform really well in terms of working capital changes down by almost 200 million, mainly in the transmission business, and despite the adverse effect of the rising metal price that unfortunately may be there also. for this year, 2026, impacting our cash flow. You see that we leveraged down to 3.1 billion debt with the acquisition, which is almost entirely or entirely the acquisition of Channel, including the earn-out of $1,000. And 69 million, which is almost fully covered by the issuance of the hybrid bond, close to 1 billion. And you see here, totally taken out from the free cash flow, the effect of the disposals proceedings. 675 million, out of which 565 are related to the YFC disposal. That's it. Back to Massimo for the output.

Thank you, Francesco. The output is pretty straightforward, and it is actually very outstanding in terms of confidence and commitment of the company to make it happen. 2.7 million bit points in the EBITDA guidance, which sets a 300 million EBITDA increase over the ending point of 2025. But in reality, considering There is 80 million perimeter adverse impact between, sorry, there is 80 million forex effect adverse. It is actually a 380 million EBITDA increase if you nephrorize the forex. You see on the right hand chart that the bridge is playing that will be, there is a significant organic growth. On top of it, there is a perimeter effect. It is more or less 80 million, so by coincidence is that size. that needs to be in place to offset the forest impact. I think it's very, I would say, brave, but we are very confident of achieving it. It's much better than what we've seen across the other peers. Not necessarily the cable space, but in general. And we are very, very committed to achieving it. Do you think it's even stronger? Again, 50% conversion rate, 1.3 billion, 1,250,000. Well ahead of what we need to be, where we need to be in 26, 2028 capital market rate target. So confident what should be bought and continue the journey with organic growth and the M&As. These sustainability link revenues will move from 44% 25 to 48 midpoint. One important remark. In our EBITDA, there is not any possible benefit, any, coming from the tariff situation. We haven't seen it yet in the past 10 months. As I told you, it will take a little bit for the importance to change behavior in the market and allow us to gain share. And we didn't want to build any speculative benefit coming from the tariff situation, which has changed in a certain extent, but not much at all. We will see upside, possibly, coming from tariff in the coming months or coming quarters. Having said so, I close saying that we confirm the stronger drive in transmission business also for 2026. The time integration is a successful integration, considering that after concluding the amount payment that we had paid this company with a multiple of less than seven, and the synergy will kick in in 26, adding additional accretion to the digital solution. The outstanding cash generation 22 will be 24, 5, sorry, will be supported in 26 with additional cash flow. the dividend will increase from 0.80 to 0.90. And, of course, this is what we see organically, but you know that we keep working on the M&A. When this will happen, we cannot tell you yet, but there will be something happening in the next short term. Thank you for your attention. I'd like to move on to the Q&A session.