Prysmian S.P.A. Ord

Good morning everyone, thank you for joining this call, quarter two result, we are at Prismian, 730 million EBITDA, 15.4% EBITDA margin, 9.4% organic growth. So as you see, it's a great quarter from the The numbers perspective is also great in terms of the achievement of the hyperscalers and wallets deals with a 10 billion incremental revenues in the optical space over the next 10 years. Also on the sustainability side, we exceed our expectation with that 46% of the current revenues lean to sustainable solutions. When you read 46%, you need to read almost 10 billion relics, where we provide customers with low carbon footprint and solutions that help them achieve their own targets. 42% is the amazing reduction of scope 1 and 2 over the baseline of 2019, setting great confidence in achieving the net zero by 2035, well ahead of everybody else. Moving to this quarter two perspective, I think it's important to share these slides. It's important to share this different perspective, which we are very proud of. You see, in quarter two, we created the EBITDA higher than what has taken us more than 12 months in the past, in 2018. We generated 700 million EBITDA over the full year. In 2022, it has taken us six months, one semester, to deliver a similar EBITDA. Now we did this in one court. This is a strong sign of the effectiveness and the good execution of the strategy that we designed years ago. So the strategy is basic. basically set on standing the transmission business, growing leadership in North America thanks to the acquisition, and also shifting our focus from cable manufacturer that was our past driver of growth to solution provider. Entering to the digital solution space with more detail, I think you read the press release, I'd like to give you more color around the deals. So these are test medium revenues that applies to the optical space. So forgive us, there is a time lag in the slide change. You'll see at the bottom on the right that our digital solution business covers three segments of business. One is optical, which accounts for 40% of the revenues in digital. Connectivity, so components to connect cables, and MMS, which is copper cables. Both, the last two, accounted for 30% of the total revenue. You see on the left chart the green bars explain our involvement in data center activities. The horizontal line sets the scene relative to the past situation, where we had in 25 years Green Data Center Exposure, Data Center Exposure in Green, and in Gray, the Fiber to the Own Business, you see that we're adding this 1.1 billion at the run rate, incremental revenue. At the same time, we are relocating the best part of the original Fiber to the Own Business to Data Center to gain even more share. And when you look at the 2031 perspective, you see that 90% of our revenues and even more in terms of BTDA belongs to data center expansion. And we see ourselves as the company enabling the data center expansion better than anybody else because alongside optical, we have the whole range of, a broad range of power cable products. Lastly to mention is the submarine telecom interconnection long haul thanks to the XTERRA acquisition. So this is definitely a transformative opportunity for the digital social space in Prisnia. From a very sacrophobic business into a fast-growing business that is meant to achieve a sizable EBITDA by 2020-31. We'll give you more detail about this at the next Capital Market. Moving to the segment of business, E-Transmission continues their strong journey in terms of EBITDA. Margin at 22%, 21.2%. In terms of organic growth, extremely solid, 14.3% in port 2. And in absolute value, 180 million in port 2. When you compare this to same port last year, you see almost 60 million EBITDA accretion. In power grid, We confirmed what we basically told you last quarter. You see a significant rebound in EBITDA margin from 12.4% to 13.8% sequentially, with 135 million EBITDA, supported by strong demand in the US and also strong demand in Europe. But I would say that there is a kind of solid demand across all the other regions, because the strengthening of the grid is a very common and a learning driver of growth across all segment or market in our geographies. The organic growth was particularly satisfactory at 13% increase in this quarter. Moving to industrial construction, also here we improved significantly, 228 million EBITDA, 20 million sequentially over 2025 quarter two. We have 5 million headwinds coming from Forex, so even better when we excluded the Forex effect. Dividend margin rebounded from the 13% of Q1. We had a very strong Q2, especially in the United States, with a very strong month of June inside this Q2. Grandly growth in the U.S. is higher. The group averages 13.4%, driven by data centers, so not only, also driven by the non-residential market that has shown different signs, new signs of improvement vis-à-vis a kind of a flat situation in 2025. Specialties are still suffering from weak demand in elevators, in oil and gas, and Profitability under pressure in the automotive business that is remaining with us. But we maintain it stable. It's a solid driver of EBITDA in different regions. And it's a nice complement to the industrial construction business because those are sophisticated cables that we couple with industrial construction business to electrify equipment alongside it. So it's an important complement and portion of our portfolio. Digital is the star of the quarter. You'll see the standing EBITDA margin, 24%, coming from 20.6% in quarter one. 24% is not the end of the game. It's not the end of the story. The 24% will go further up in the future. So this is said to be the most profitable from the bid amount perspective inside our portfolio, beating the transmission business at 21% bidder margin in the quarter. You see how sizable is the increase over quarter 2025, 60 million, out of which 30 million are attributed to the perimeter change. Last year, we had a channel including the port only for one month. This year is for the full period, but the rest, From 60 to 90 is channel, from 90 to 122 is DSC's original perimeter. And you see the power of pricing, efficiency, scale, and the shift from farmer to the home to the intercept. Our sustainability and innovation QPIs are also extremely satisfactory. The 25% recycled content in Portal 2 is a sign of a lower reliance on the tight copper market in the United States. We recycle more waste than we used to do in the past, lowering our costs and securing the supply chain and shortening lead time. 46% of revenues are augmented already before. These are 32%. of Vitality PPI is also an important indicator of a crucial and key for this company is to continue innovation. This is telling that one third of our revenue has been achieved through products that we launched to the market in the last three years. And one third of our revenue accounts for seven billion. So we have in this year, seven billion revenues generated by new products. Why is this important? because your product means a higher share of wallet, it means higher profitability, it means a different pricing power, it means a different value provided to our customer to strengthen our relationship. So key parameter for our growth in the future as well in the past. To example of the innovation out there, Holocore Fiber is an innovative solution to convey data through air so a lot faster 30% faster than standard glass technology, allowing the data center to be further spaced out, evolving to create a congestion on existing energy grids, which is the real constraint to data center storage. And also in the transmission business, a very innovative solution to bury cable at a deeper depth, greater depth than the standard methodology, making the network more secure, more resilient, and providing customers an upside in terms of reliability of the connection. Let me now go to Francesco for more details on the financial results of the quarter.

Thank you very much, Massimo, and good morning to everybody. As usual, let me use the profit and loss to recap some of the messages that Massimo has already passed. The organic growth in the first half was in excess of 7% with a very good acceleration. in the second quarter, reaching 9.4% in the second quarter. I have to say that all the segments of the company performed extremely well in terms of organic growth, with a growth of 14% in transmission, 13% in power grid, 9% in ILC, 18% in digital solution, with the only little exception of specialties, which was substantially flat or slightly negative. The performance was very strong in terms of EBDA, as Massimo said, the best yet quarter at 730, with a sequential increasing EBDA margin at standard metal at 15.4%, and with a very substantial growth from the second quarter of last year, plus 125 million, but also sequentially from Q1, plus 130 million, as you see from the right box of this chart. The lion's share of this growth was taken by transmission and digital solution, plus 54 million and plus 65 million, respectively. Of course, with the support also of the great performance of channel that Massimo mentioned. Power grid improved the margin sequential, which is very important. and as you have seen, organic growth in power grid both in Europe and North America was extremely positive. Electrification and particularly ID&C performed the best quarter in the last, I would say, 18 months. So very positive, specifically in North America. Very good note also on the group net profit. that reached 569 million in the first half, by far the highest ever. And this is other than the EBITDA and the operating result supported by a very nice drop in financial charges that you see here. A slight improvement also of the tax rate and this assesses Our group net profit estimate for the full year in excess of the 1.2 billion, which will mean a growth of earning per share, which is significantly beyond the original targets that we had set. Let me now turn to the cash generation, which was solid, close to 1 billion in the last 12 months of June, a bit lower than the one that we had in Q1. The main reason, I would say the only reason, is the very high impact and adverse impact of the rising metal prices. which reached actually the peak in the Q2 and which will progressively decrease in terms of adverse effect in the second half. Massimo will show you the updated guidance on the free cash flow, but we plan an extremely strong second half On the back, of course, of the contract with Molex, which will bring in a very substantial down payment, but even more importantly, on the back of a very strong cash flow coming from the transmission business. This year, the transmission business cash flow is mainly concentrated in the second half, and we are also doing great in terms of improving our working capital performance and efficiencies. All these will contribute to this quite, I would say, strong target that we have set for the year, Massimo will explain in a while. I think I'm over. Back to Massimo.

Francesco, thank you. So, quickly, two main challenges. The EPTDA, we raised these 2.7 billion of the original guidance to 2.850, so a range of 2.8, 2.9. It's We're saying that we have super high confidence to be the 2850 to end up in the top portion of the upper part of the range, 2850-209. You see that 2850 itself is already quite close to the target we set for 2028 at the Capital Market Day 2025, which means that we will certainly in the next period Porta 1, Porta 2, 26, 7, sorry, we will go out for a new capital market day, providing and disclosing the trajectory from 2027 through 2030, 3031, with organic growth and the song driver explanation of where we see this growth in the different geographies. And free cash flow is an amazing number. Now, 1.7 billion is, of course, the highest level free cash flow of the company. It is true that there is a 250 million coming from Molex as a down payment, but equally important to mention that there are significant increase in CapEx, partly to support digital solution capacity expansion, but partly to start showing the growth that we had to underline that we will disclose next year at the Capital Market Day. This is organic across many segment and many geographies in North America. but also Europe, also other regions, and transmission. So the 1.7 is the effect of molex on the one end, some additional capex in 26 that will continue stronger in 27 and beyond, with the efficiency and the additional BTD8 offsetting the metal impact versus the original guidance. And the metal impact is around 250 million euros. With this, I move to the closing remarks. So, great performance. Super satisfied about the change in pace of the company, the company showed this quarter. As I said before, we have this unique opportunity to be the only one serving data center with the whole product range they need for this function. We are going to invest in growth in 26 and beyond 26. And the acceleration, I mean, paves the way for a new capital market day into the start of 27. I would like to end over to you for your question and more details about our success story.