Under new CEO, Prysmian makes solid start to 2024

Following an “outstanding” 2023, Italian cabling giant Prysmian has made a solid start to 2024, reporting a net profit of €190 million for the first quarter of the year, compared to €187 million in the first three months of the prior year.

Group sales amounted to €3,687 million, with a -5.6% organic growth, while adjusted EBITDA reached €412 million, compared to €427 million in Q1 2023, with improving margins at 11.2% compared to 10.7%.

EBITDA amounted to €393 million, a slight decline from €398 million in Q1 2023, including net expenses for company reorganizations, non-recurring expenses and other non-operating expenses of €19 million. Free cash flow LTM rose to €827 million, up by 42.3% compared to €581 million in March 2023, while net financial debt fell sharply to €1,693 million (€2,074 million in March 2023), driven by strong cash flow generation.

“Prysmian has had an solid start to 2024. The first quarter results highlight an outstanding profitability, driven by the strong performance of the Power Grid and Transmission segments, while the order backlog stands at over € 18 billion,” said Massimo Battaini, Prysmian’s CEO, said.

“My first year as Prysmian’s CEO is also marked by the signing acquisition of Encore Wire. This transaction is a unique opportunity to further grow and strengthen our position in North America, enhancing the diversification of our business and creating value for all stakeholders.”

In Transmission, sales amounted to €474 million, with +1% organic growth, while adjusted EBITDA rose to €62 million, compared to €54 million in Q1 2023, with solid margin improvement to 13% (11.2% in Q1 2023). Prysmian received the Notice to Proceed for Amprion Frame Agreement and Eastern Green Link 2 (EGL2), bringing the total backlog up to over €18 billion.

Sales in Power Grid amounted to €852 million (€853 million in Q1 2023), with organic growth of 1.5%. HVAC was particularly strong with double-digit growth in EMEA and North America. Adjusted EBITDA leaped to €115 million (€73 million in Q1 2023) with strong margin improvement at 13.5% (8.6% in in Q1 2023) said to be sustained by structural market trends (grid enhancement), in particular in North America.

Sales in Industrial & Construction totaled €1,193 million with -5.8% organic growth versus Q1 2023, mainly driven by softening raw material prices, while total physical volumes grew marginally, with a more robust growth in North America. Adjusted EBITDA declined to €114 million, compared to €154 million in the same period last year. The slower-than-expected price normalization in the U.S. was partly offset by margin improvement in the other regions, mainly in EMEA, Prysmian said.

Sales of Industrial & Network Components amounted to €762 million with -2.3% organic growth. Renewables continued double-digit year-on-year growth, with strong performance in EMEA. Adjusted EBITDA grew further to €85 million (versus €78 million in Q1 2023) with sound margin expansion at 11.1% compared to 9.8% in Q1 2023, driven mainly by OEM and Renewables.

Prysmian confirmed that its GHG emission reduction trajectory is well on track with the long-term decarbonization trend and in line with 2025 targets. In the last twelve months, Scope 1 and 2 emissions are down 35% compared to the 2019 baseline.

For the full year of 2024, the Italian company confirms the guidance announced in February and expects to achieve the upper end of the range, including an adjusted EBITDA in the range of €1,575-€1,675 million, free cash flow in the range of €675-€775 million, scope 1&2 GHG emission reduction of 36% and Scope 3 reduction of 13% versus 2019.